Archive for the ‘South China Morning Post’ Category

China still reluctant to use its power and influence in Eurasia, despite crises in Ukraine and Afghanistan

Posted: February 26, 2023 in South China Morning Post
Tags: , , , ,
0

Another piece from last month, this time for the South China Morning Post, exploring China’s continuing reticence to put itself forwards as a player in international affairs. Stands in contrast to their recent peace push on Ukraine, but then there is a difference between the surface and behind the scenes view in Beijing.

China still reluctant to use its power and influence in Eurasia, despite crises in Ukraine and Afghanistan

  • Russia’s invasion of Ukraine and Afghanistan’s instability are blockages to Beijing’s vision for Eurasia, but it has done little to fix either
  • In the decade since the belt and road was first discussed, China has become a major player in the region, yet it appears unwilling to step in to help resolve conflicts

Russia’s invasion of Ukraine and Afghanistan’s instability are blockages to Beijing’s vision for Eurasia, but it has done little to fix eitherIn the decade since the belt and road was first discussed, China has become a major player in the region, yet it appears unwilling to step in to help resolve conflicts

This year marks the first decade of the Belt and Road Initiative. While the vision might have evolved from the speeches President Xi Jinping gave in Astana and Jakarta in 2013, it remains a key concept that has been enshrined in Communist Party doctrine. The territory it started marching across has changed dramatically, but what has not yet changed is China’s willingness to step into a leadership role within this space.

Most glaringly, this is visible in the two major conflicts that now dominate the Eurasian heartland where the initiative was launched. Russia’s invasion of Ukraine last year has upended the regional and global order, while the Taliban takeover of Afghanistan in mid-2021 has left an unstable state at the heart of the Eurasian land mass.

Together, these countries and their troubles present a major strategic blockage for China’s wider vision. However, there has been little evidence of Beijing seeking to fix either.

In fact, China seems set on simply letting both clashes play themselves out while offering platitudes in public which serve to suggest Beijing might seek to do something. In both contexts, China is a logical option to play a role in trying to resolve matters, and those on the ground are keenly aware of this.

Before the Russian invasion, China was Ukraine’s most important trading partner and a growing investor. The Belt and Road Initiative swept across Eurasia and saw Ukraine as a key link between Europe and Asia. With infrastructure and raw materials, technologically savvy and an underdeveloped economy on the European Union’s borders – it was a highly attractive prospect for Chinese investors.

Russia’s war has stymied these dreams while also posing a major threat to planned investments by Chinese firms in Belarus. Chinese companies and banks had intended the country to become a way station for products coming from China into Europe’s wealthy markets. But projects now sit idle while investors try to figure out how to adapt to the new reality.

In Afghanistan, China has long been the country’s wealthiest neighbour, with both Beijing and the Taliban government eager to find ways of encouraging Chinese investment. Neither has found that easy, though the Taliban appears to be following the path of the previous government after it signed a contract with a China National Petroleum Corporation subsidiary to exploit oilfields in the north of the country earlier this month.

CNPC had previously signed an agreement with the Afghan republic government in 2012 to extract oil from the same area, but that failed to live up to expectations. Other projects remain in the discussion phase, with growing appeals from the Taliban for Chinese firms to start to deliver.

But while it remains to be seen if the project lives up to its promise, the investment has shown that China is still in a position to play an important role. This is true in other parts of Eurasia, too.

The announcement that a Chinese firm could step in to develop Tehran’s international airport follows Beijing’s willingness to purchase Russian energy. China increasingly seems willing to serve as an economic backstop to countries being sanctioned by the West, and in so doing it can strengthen its position as a critical player across Eurasia.

However, there has been little evidence of China using this influence to seek to resolve problems or step in to advise leaders. Notwithstanding the rhetoric about wanting a peaceful resolution to the war in Ukraine and statements about respecting national sovereignty, there is no evidence that Beijing has sought to restrain Moscow.

Vague comments about not wanting nuclear conflict or wider instability are hardly attempts to steer Russian President Vladimir Putin in a particular direction, but are merely statements of fact. Nevertheless, Ukraine continues to hope that Beijing might step in to mediate.

In Afghanistan, China has found it as hard as everyone else to engage the Taliban. The recent oil project was driven by the company rather than the state. In fact, not long before the contract was signed, China’s Ministry of Foreign Affairs warned nationals in the country to consider leaving given the deteriorating security situation, highlighted by an attack on a Chinese-owned hotel in Kabul.

Economic activity in Afghanistan has, for the most part, been driven by the private sector. China has provided some aid, but it has not stepped into the economic void.

This is the critical point. China is clearly viewed as a significant player, yet it remains unwilling to step into the fray. From a Chinese perspective, this is just an extension of Beijing’s principle of non-interference but, in reality, it means that one of Eurasia’s mightiest rising powers is failing to play a leadership role in its own backyard.

A decade on from the announcement of the Belt and Road Initiative, China has risen to become a major player in Eurasia. But it has yet to do much with this power and influence, choosing instead to focus on the United States and Taiwan, and simply assuming a watching brief over the growing instability. The vision of the belt and road, at least for others, was for the initiative’s sweep across Eurasia to increase China’s influence. That has yet to translate into reality.

Raffaello Pantucci is a senior associate fellow at the Royal United Services Institute (RUSI) in London and a senior fellow at the S. Rajaratnam School of International Studies (RSIS) in Singapore

Why Uzbekistan and Kazakhstan’s hopes of using China as hedge against Russia could be doomed

Posted: January 20, 2023 in South China Morning Post
Tags: , , , , , ,
0

More from late last year, this time trying to dig into the narrative that emerged of Kazakhstan in particular seeking to use China as a counter-weight to Moscow for the South China Morning Post.

Why Uzbekistan and Kazakhstan’s hopes of using China as a hedge against Russia could be doomed

  • Central Asia’s increasingly tense relations with Russia have made closer ties with China attractive, but achieving that is not without its problems.
  • Far from Beijing proving a hedge against Moscow, the opportunities on offer in Russia might simply increase the competition for China’s attention.
Chinese President Xi Jinping (left) walks alongside Uzbek President Shavkat Mirziyoyev at the Shanghai Cooperation Organization summit in Uzbekistan on September 16. Uzbekistan and Kazakhstan have welcomed China’s interest in Central Asia, but that interest has been complicated by the pandemic and geopolitical concerns. Photo: EPA-EFE

Uzbekistan has in many ways always been the heart of Central Asia. It might be dwarfed in hydrocarbon wealth and physical size by Kazakhstan, but its other attributes give it influence. Yet, China does not have the same sort of commanding position within the country as it has with Kazakhstan.

There are numerous reasons for this, from local hesitance to problems in China, but collectively they illustrate the trouble Central Asia faces as it seeks to use Beijing as a hedge against Moscow, with whom relations have grown increasingly testy.

The difference in how Uzbekistan and Kazakhstan see their relationships with the two capitals was most clearly seen in the past few weeks. They both abstained from a vote against Russia on Ukraine at the United Nations, while they voted against a UN resolution seeking a debate on Beijing’s actions in Xinjiang.

Both have been appalled by Russia’s invasion of Ukraine. While some individuals within the countries might hold some moral objections towards what China is doing in Xinjiang, they largely see this as a domestic issue within China.

There is no doubt some element of hard geopolitics has also played into their thinking. Both Kazakhstan and Uzbekistan have expressed reservations about Russia’s actions in Ukraine publicly before and are concerned about the clear evidence of Russian weakening.

They seek new partners to help stabilise their increasingly tormented neighbourhood. Their embrace of President Xi Jinping’s visit to the region in September underlines their eager eagerness for more Chinese investment. 

But at the same time, both are aware of the complications of increasing their dependence on China. This came into view during the Covid-19 pandemic.

Uzbek traders report that during the height of the pandemic, the costs of containers going through China to Uzbekistan rose by at least five times. While they have since gone down, they remain more expensive than they were pre-pandemic. The growth of traffic through the region to Russia helps keep them high alongside complications on the Chinese side.

At the same time, routes into China have only recently reopened, even though opening them was a focus of regular lobbying during the pandemic as landlocked Central Asians sought to get goods out and in.

The problems went beyond goods at borders. According to Uzbek data, the pandemic led to an abrupt drop in the number of new companies being created in Uzbekistan with Chinese investment. The numbers have started to rise again but are far below pre-pandemic levels.

China has retained its trade primacy in Uzbekistan, though the numbers are lower than before the pandemic and dipped substantially in 2020. All of this comes on top of Chinese companies in Uzbekistan being seen as behaving in ways that will keep local authorities happy but do not always actually deliver.

For example, media reports and experts on the ground suggest there has been a steady growth in recent years of Chinese companies opening factories in Uzbekistan. This is something the authorities welcome, eager to turn the country into a manufacturing hub. Yet at the same time, it is not clear how much these factories are actually manufacturing rather than serving as assembly plants. 

The reasons for this from a Chinese perspective are logical – it is often not clear the local market will be able to absorb the volume more active plants could produce. However, the consequences are a smaller level of local capacity building.

It also means it can often be quicker and cheaper to simply import the desired piece of machinery directly from China rather than purchase it from the local manufacturing plant. The factory is going to have to wait for the parts from China and then take time to assemble the product in Uzbekistan. Once you factor order book backlogs on top of this, it can become quite a long wait. These problems are not exclusive to Uzbekistan. Import-export firms across the region have noted the trade problems with China during the pandemic, and the unpredictability these have injected into an economic relationship both sides assumed would simply continue to boom. 

This reality lurks in the shadows of the push to warmly embrace Xi. Both Uzbek President Shavkat Mirziyoyev and Kazakh President Kassym-Jomart Tokayev made it clear they welcomed and sought a closer relationship with China. Kazakh officials behind the scenes were ecstatic about Xi’s comments about being willing to defend their national sovereignty, interpreting it as a protective clause should Moscow’s revanchist eye fall on their territory.

Yet the reality is that China is unlikely to play that role or do much to prioritise trade with the region. This reticence will emerge elsewhere as well, leading to frustration on the ground.

This might eventually turn in an even more complicated direction as Beijing leverages the surge of hydrocarbons and other opportunities that will present themselves as Moscow seeks new markets, against the same purchases and opportunities they see in Central Asia. Far from Beijing proving a hedge against Moscow, Russia might in the end simply increase the competition for China’s attention.

Raffaello Pantucci is a senior associate fellow at the Royal United Services Institute in London and a senior fellow at the  S. Rajaratnam School of International Studies in Singapore

China won’t be filling the void left by the US in Afghanistan any time soon

Posted: December 19, 2022 in South China Morning Post
Tags: , , , , , , , ,
0

A new piece for the South China Morning Post this time exploring the fact that all of the prognostications of China, Russia and other adversary powers sweeping into Afghanistan have not come to pass. In fact, they all appear to have more complicated relations with the Taliban than the US does at this point. There is more to say on this topic, so look out for a refresh soon.

China won’t be filling the void left by the US in Afghanistan any time soon

  • Rather than being quick to gain an edge in Afghanistan following the US withdrawal, China, along with Russia and Iran, remains uneasy about security threats coming from the country
  • Meanwhile, the Taliban government is frustrated at the lack of economic support being provided by its neighbours

A Taliban fighter stands guard at Wazir Akbar Khan hilltop in Kabul on August 30, the one-year anniversary of the US withdrawal from Afghanistan. A year and a half on from its withdrawal, the US has managed to establish a regional foothold which enables it to at least deal with some of its security concerns. Photo: AFP

There was a lazy narrative that emerged in the wake of the Taliban takeover of Kabul that this would be a major victory for China. The operating assumption was that Beijing would swoop in and fill the geopolitical void left by the Western withdrawal.

Underpinning this was a general sense of Western decay which “adversary” powers – China, Russia, Iran – would be able to take advantage of. Yet as we have seen ahead of this month’s meetings known as the Moscow format talks, these powers are having as many, if not more, problems with the Taliban government as the West.

The Moscow format is a Russia-initiated group that was established in 2017 to bring together Afghanistan’s neighbours. It includes Russia, China, India, Iran, Pakistan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan.

The last meeting of the group was held in October 2021 and included representatives from the Taliban, who walked away from the session feeling that there was a “positive atmosphere”. The format also agreed to treat the Taliban as the de facto authorities in Afghanistan (acknowledging without acknowledgement) and sought to put pressure on the United States to lift all sanctions against the regime.

It is consequently quite a turnaround for Russian coordinator Zamir Kabulov to announce that “the Taliban delegation will not take part [in the meeting], it is only for members of the Moscow format”. The format in his view was to focus on fostering closer cooperation among Afghanistan’s neighbours, while encouraging the Taliban to act on women’s rights and deal with terrorist threats.

Kabulov did not offer any explanation for not inviting the Taliban to the talks. It is not hard, however, to guess why.

The decision is likely linked to a growing frustration among Afghanistan’s neighbours at the Taliban’s seeming inability to deal with the security threats they are all worried about. The ISKP, an affiliate of the Islamic State militant group, has lashed out in its neighbourhood with little evidence of an effective Taliban response.

Iranian authorities have pinned the recent terrorist attack that killed 15 at a shrine in Shiraz on ISKP, while the group also claimed responsibility for the attack on the Russian embassy in Kabul in September that killed two Russian officials, among others. Rocket attacks on Central Asia that came from Afghanistan have also been claimed by the group.

China has so far been spared any direct assault, but the ISKP’s publications are full of anti-Chinese narratives. And Beijing continues to be frustrated by the Taliban’s failure to crack down on armed Uygur groups that are living in the country.

The irritation goes both ways. The Taliban have also found themselves frustrated by the level of commitment from some of Afghanistan’s neighbours. While Central Asian countries have sought a tight economic embrace to help stabilise the country, China has delivered very little.

Beijing has sent some aid, but much of the economic activity seen in Afghanistan has been driven by private enterprise. The large Chinese state-owned enterprises with interests in Afghanistan have held numerous meetings, but actual progress has been slow.

Russia has sent delegations of officials to Kabul and hosted Taliban interim Minister of Industry and Commerce Nooruddin Azizi. They have signed agreements about food, oil and aid, but investment has not been forthcoming.

This stands in contrast to the success of the United States in dealing with its direct security concerns – as exemplified by the drone strike that killed al-Qaeda leader Ayman al-Zawahiri. The US has also provided at least US$327 million in aid, and has opened direct lines of communication with the Taliban through meetings in Kabul and Doha attended by the CIA chief and his deputy, respectively.

The US has also leaned heavily into its security cooperation with Afghanistan’s Central Asian and South Asian neighbours. At the same time, Washington has not compromised on handing over money it had frozen in the wake of the Taliban takeover, instead creating a special fund in Switzerland which will manage the money to pay for key national requirements like electricity.

This has not been seen as positive by the Taliban, who remain furious at Washington for “usurping” their money. And yet, the approach has borne some fruit for the US. The release in September of US prisoner Mark Frerichs in exchange for a Taliban warlord and drug dealer in American detention reflects an ability to strike an agreement with the Taliban that pleases both sides. And it is likely other agreements have been reached behind the scenes too.

It is not impossible that both China and Russia have sought similar arrangements, but the public optics are noticeably different. Russia failing to invite the Taliban to the Moscow format follows growing irritation in Kabul around the lack of Chinese investment, and growing concern in Iran about terrorist attacks on its territory.

A year and a half on from the US withdrawal from Afghanistan, we have come full circle. The much vaunted vacuum has not been filled by regional “adversary” powers, while the United States has managed to establish a regional foothold which enables it to at least deal with some of its security concerns.

So much for the narratives of China filling the void.

Raffaello Pantucci is a senior associate fellow at the Royal United Services Institute (RUSI) in London and a senior fellow at the S. Rajaratnam School of International Studies (RSIS) in Singapore

How Pakistan’s new prime minister completes a favourable picture for China in the region

Posted: September 11, 2022 in South China Morning Post
Tags: , , , , ,
0

Still catching up on myself after my extended delinquency, here posting something about Pakistan in the wake of Shabhaz Sharif’s rise to power in the South China Morning Post. Think it still holds water reasonably well now, though I am not sure I quite see China seeing a field of friends across its border any more. Suspect it is more complicated than that, but then it always is. This coming week and the SCO Summit and President Xi’s visit to Kazakhstan and Uzbekistan is going to be a really interesting attempt to connect with something. Be interesting to see how it plays out.

How Pakistan’s new prime minister completes a favourable picture for China in the region

– Shehbaz Sharif’s rise to power in Pakistan puts China in an advantageous position as its western neighbours all have governments friendly to Beijing.

– This also means China has a stake in the many problems that emanate from this region, though, and will be forced to take a more active role.

Illustration: Stephen Case, South China Morning Post

The election of Shahbaz Sharif as prime minister of Pakistan by legislators completes a series of events which place China in a favourable place in its Eurasian neighbourhood. Beijing now has a leader in Islamabad with whom it has had a successful relationship in the past.

China is also increasingly presenting itself as the closest partner to the new Taliban government in Kabul, and in Central Asia it faces a region where Russia – the other major power – is distracted by a disastrous war of its own choosing in Ukraine. China’s march of influence westward is continuing, but Beijing has still made no clear decision about what it will do with this influence.

When Nawaz Sharif – Shahbaz Sharif’s brother – was prime minister, the China-Pakistan Economic Corridor was jokingly called the “China-Punjab Economic Corridor” because many of the largest, juiciest investments appeared to be going to Nawaz Sharif’s home province of Punjab. At the time, the chief minister of Punjab was Shahbaz Sharif.

The reality is that the economic ­corridor’s investment has been fairly spread out around Pakistan, though completion rates seem better in Punjab and Sindh. However, it is worth noting that Punjab is Pakistan’s most populous region, so perhaps the focus of Chinese investment there is hardly surprising. 

The tilt towards Punjab also reflected the fact that Beijing liked Shahbaz Sharif and found him a competent leader to engage with. Pakistan has a challenging political and economic environment, and in Punjab China found someone who could deliver. 

Now Sharif has ascended to power after the tumultuous reign of former cricket star Imran Khan. While Beijing has been careful to avoid expressing a preference for one leader over another, China likes having decisive and effective leaders in charge.

Khan was acceptable because he was seen as being the military’s man initially. He was also happy to be outspoken in his support for Beijing while China came under fire for what is happening in Xinjiang. But China has faced growing problems in Pakistan in the past few years as its interests and nationals are increasingly targeted by militants. 

China has always been happy dealing with military men because of their ability to deliver on outcomes. Beijing was in many ways most content when former general Pervez Musharraf was in charge in Islamabad. A former commando, he tended to tackle problems headfirst and actively sought to make sure China was happy even when this caused him problems at home. 

But Sharif is an excellent alternative from Beijing’s perspective. This completes a picture for Beijing where it is dealing with authorities across its western borders with whom it seems satisfied. In Kabul, Beijing has shown itself to be a powerful player in tightly embracing the Islamic Emirate of Afghanistan government.

In Central Asia, China has a series of leaders who are either willing to quietly engage to advance whatever goals it wants or are actively eager to cultivate a positive economic relationship. In Kazakhstan, it has a leader who studied and worked in China and speaks Mandarin. This is a highly advantageous environment for Beijing. 

However, Central Asia is also a highly troubled region, as we have seen in the past 12 months with the collapse of the Republic of Afghanistan and the chaos in Kazakhstan at the beginning of the year. Also, non-state groups in the region increasingly see China as an adversary they are eager to focus on.

The China-Pakistan Economic Corridor continues to be a narrative focus for Balochistan separatists in Pakistan, while Islamic State Khorasan has referred to China as an adversary in its literature and deployed a suicide bomber last October in northern Afghanistan’s Kunduz province. At a less violent level, nationalists in Kyrgyzstan have expressed anger towards China and attacked Chinese nationals, while public polling across Central Asia often places China in a negative light.

Beijing thus faces a major dilemma on a shortening horizon. It can no longer claim to have only passive influence across its Eurasian borders or face hostile authorities in power. It now has governments in power across the board that seem eager to actively please China. This also means China increasingly has a stake in the many  problems that emanate from this region.

As the power closest to the governments in both Kabul and Islamabad, China now has little excuse for not trying to mediate the tense relations that continue to exist between the two capitals. As one of the largest investors in and increasingly the largest trading partner with both Tajikistan and Kyrgyzstan, it will start to look odd if Beijing does not try to help the two smooth over their occasionally violent border relations.

Should further trouble erupt and Moscow is too preoccupied elsewhere to do something about it, Beijing will have to think about how it will manage the  situation. Its currently passive approach might not always work out.

China is increasingly the most  consequential actor in Eurasia, and it now has governments in power across the region who actively recognise that fact and are eager to please Beijing.

This both puts Beijing in a position of power but also one of great responsibility. It remains to be seen how China will rise to this challenge.

Raffaello Pantucci is a senior associate  fellow at the Royal United Services Institute (RUSI) in London and a senior fellow at  the S. Rajaratnam School of International Studies (RSIS) in Singapore.

How the West’s focus on China’s ties with Russia misses the bigger geopolitical picture

Posted: April 19, 2022 in South China Morning Post
Tags: , , , ,
0

Almost caught up, but then will invariably get behind, another short piece for the South China Morning Post inspired by events in Ukraine, this time trying to tackle the obsession in the west about China’s support for Russia.

How the West’s focus on China’s ties with Russia misses the bigger geopolitical picture

  • The US and EU’s condemnation of Russia and repeated calls for their allies to do the same reflects a world view in which democracies stand united against autocracies
  • In reality, drawing battle lines is far more difficult when interests and values rarely align
Illustration: Stephen Case, South China Morning Post

The single-minded focus on China’s friendship with Russia misses the far wider range of supporters around the world that Moscow has been able to muster. It is this wider web that really highlights the difficulty the US and Europe will have in marshalling international support to condemn Moscow’s actions.

The myopia reflects the difficulty in playing the complicated game of three-dimensional chess that is international geopolitics, where relationships are coloured by shades of grey and focus on interests rather than values.

There is no doubt China has chosen to side with Moscow over the conflict in Ukraine. But it is important to note that this choice has been carefully couched as not being against Kyiv, but in opposition to the US and Nato’s missteps in causing the problem in the first place by antagonising Moscow.

Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.

Beijing’s choice is also the result of a calculation that Russia remains a critical ally in China’s wider confrontation with the West.

This framing may anger the West, but it is one that Ukraine seems willing to (at least in public) accept. In recent comments, the head of President Volodymyr Zelensky’s office, Andriy Yermak, described China’s position as “neutral”, while saying that Ukraine’s leader was expected to talk to President Xi Jinping soon.

China was Ukraine’s largest trading partner before the invasion, and there is every chance that this economic relationship will pick up where it left off should stability ever return to the country.

Such commentary stands in contrast to Kyiv’s views on India, the other Asian giant that has stood behind Moscow. As the invasion unfolded, Western leaders called on New Delhi to stand behind them in condemning Russia.

Prime Minister Narendra Modi’s government declined, leading Ukraine’s Ambassador to India Igor Polikha to declare he was “deeply dissatisfied” with India’s stance, calling on New Delhi to be “much more actively engaged, given the privileged relations India has with Russia”.

Few who had been paying attention would be surprised by India’s position. The country’s military-industrial relationship with Russia is a long-standing sore in US-India relations, fuelling concerns about defence and intelligence transfers.

Neither New Delhi nor Beijing, however, are outliers. Both have chosen to abstain in United Nations Security Council votes. And, in the wider UN General Assembly vote demanding humanitarian access to Ukraine and condemning Russia’s actions, they stood alongside South Africa, Pakistan, Iran, Vietnam, a range of African powers and much of Central Asia in abstaining (only a few predictable powers like North Korea, Syria, Belarus and Eritrea joined Russia in voting against the resolution).

South Africa even sought to follow up on the vote with another focused solely on the humanitarian disaster in Ukraine, omitting any refence to Russian action.

But there is further complexity within these positions. While Central Asian powers chose to abstain from the UN vote, both the Uzbek and Kazakh governments have chosen to openly reject recognition of the breakaway territories of Luhansk and Donetsk that Moscow has recognised, while also appearing to more actively reach out to Ukraine.

This seeming stand against Russia is one that flies in the face of Kazakhstan’s decision early this year to call on Russian forces to support the government in the face of mass protests, and the Uzbekistan government’s reliance on Russian security to help bolster their border with Afghanistan as the republic’s government collapsed last year.

Looking beyond UN voting, Russia also appears to have a number of friends in the Middle East. On the one hand, Iran has openly sought a closer relationship with Moscow, in large part for the same reason as Beijing – as a bolster against a confrontational relationship with Washington.

But, on the other hand, Saudi Arabia and the UAE have both also shown support for Russia while snubbing Washington – a choice that is driven by a concern about reliability of US alliances and irritation at condemnation of their own actions (their conflict in Yemen) by the West.

The reality is that international relations are grey. Countries are driven by interests that are both short and long term. An adversary today can become an ally tomorrow. The one immutable truth in international relations is that nothing is permanent.

But this is a critical problem for a West that is seeking to build a binary world of autocracies versus democracies, painting this as the defining struggle of our time. It also reflects a core tension within the approach being driven by Washington, where there appears to be a desire to create an alliance of democracies alongside a shifting constellation of coalitions focused on outcomes.

While, in theory, this is not impossible – countries are often willing to maintain contradictory policies while focusing on interests – it becomes difficult when a single-minded obsession with one adversary clouds everything else.

While American and Chinese strategic thinking may be centred on a world in which the other is the main adversary, to the rest of the world, this narrative is more complicated. And these complications do not always hold across interests, and may in fact undermine each other in crucial ways.

There is no easy way to thread this needle. But maintaining a resolute focus on interests rather than values is a disappointing place to start. This is not going to be appealing to those who want to see a world of like-minded allies or democracies ruling the waves, but is more likely to reflect the brutal reality of geopolitics, where values are not as transcendental as we might like to believe.

Raffaello Pantucci is a senior associate fellow at the Royal United Services Institute (RUSI) in London and a senior fellow at the S. Rajaratnam School of International Studies (RSIS) in Singapore. He is co-author, with Alexandros Petersen, of “Sinostan: China’s Inadvertent Empire”

Eurasia in turmoil: how China’s passivity foments the chaos

Posted: April 16, 2022 in South China Morning Post
Tags: , , , , , , ,
0

More updating from last month, this time a piece for the South China Morning Post which attracted a certain ire online at the time looking at China’s broadly passive approach to all of the trouble on its periphery of late. My point was maybe not as strongly put as the headline, but as ever headline writers are focused on clarity and not subtlety.

Eurasia in turmoil: how China’s passivity foments the chaos

  • From Afghanistan to Kazakhstan and now Ukraine, the Eurasian heartland has fallen prey to three forces: authoritarian incompetence, Russian adventurism and Chinese passivity
  • Beijing may be happy to sit out the chaos for now but it will ultimately spill over and create problems it cannot ignore
A sign outside the the Canadian embassy in Beijing on March 3 in support of Ukraine. Photo: AFP

It has been a tumultuous six months for Eurasia. The Taliban takeover in Afghanistan last August was followed by widespread civil unrest in Kazakhstan at the turn of the year and now a Russian invasion of Ukraine.

While Russia has had a prominent role in each context, it is China’s perspective that people most frequently ask about. Yet Beijing has stayed broadly passive, highlighting the role that China sees for itself in the world.

China may be the new superpower on the international stage, but it appears to have little interest in committing itself to resolving any problems that emerge in its neighbourhood or beyond.

The attention on China can sometimes seem exaggerated. We look for Beijing’s view on everything nowadays, sometimes where it is unlikely to be relevant. Yet the truth is that Beijing is a significant actor in all three Eurasian contexts.

China remains the putative largest single external investor in Afghanistan, is Kazakhstan’s second-largest trading partner (and fastest-growing investor), and since 2019 has been Ukraine’s largest trading partner.

China has undertaken or signed contracts for large-scale investments in all three countries, is an important trading partner and (in Afghanistan and Kazakhstan) has a particular interest given the shared borders.

So it is not entirely surprising that people look for China’s views in these contexts, and expect Beijing to want to step in when things turn bad. Yet, in each situation, China has instead stood by to let others try to fix the problems.

A similar playbook can be observed in all three cases. In the first instance, Beijing apportions blame – often finding the United States culpable for the situation.

In Afghanistan, the American withdrawal precipitated the Taliban takeover, making it an easy connection. In Kazakhstan, mutterings of “colour revolutions” started in Moscow and Nur-Sultan, giving Beijing ample fuel to point towards the US. And in Ukraine, China has continued to point to US-driven Nato expansion as a key underlying reason for the conflict.

Having blamed the US, the next step is to try to embrace tightly. In Afghanistan, this has led to a surge in Chinese activity on the ground, regular aid, close engagement with the Taliban authorities, regular championing of their interests at the United Nations and the constant promise (that has yet to materialise) of larger-scale investment.

In Kazakhstan, Beijing picked up seamlessly from where it left off before the trouble in January, while in Ukraine it is trying to sell itself as an impartial supporter of both sides.

Yet in all of this, Beijing commits very little. The constant presentation of multiple-point plans to resolve situations are largely empty declarations which appear well meaning but are not followed by any real evidence of effort to resolve the situations. Instead, they largely state the obvious and seem to suggest that Beijing is somewhat above the situation as a benign observer.

There is no doubt some element of Beijing’s stasis is not really knowing what to do. China’s offers to act as a peace broker have tended to be hollow, usually offering a table around which the various parties can sit.

While this is a useful role, a proper negotiator will need to work the various groups, understand their interests and force heads together. This is also likely to mean telling people what they do not want to hear, something Beijing is never very interested in doing as it potentially creates adversaries.

But so far, by sitting and watching, Beijing has not done itself much ill. While its international standing may be damaged among those who would like to see it take a more active role, by not doing so, China is leaving itself in a position where it can continue its relations with whichever party comes out on top.

And given Beijing’s strong economic interests in every situation, all the parties involved will usually have a strong incentive to continue to engage with Beijing after the chaos subsides.

But there is a longer-term problem here, which may eventually cause China some regret. The result of this passivity has been a Eurasia increasingly in tumult.

As Washington leads the West in a mostly seaborne crusade in the Indo-Pacific against China, we see the Eurasian heartland fall prey to three forces. Authoritarian incompetence, Russian adventurism and Chinese passivity. The result has been large-scale loss of life, and growing constraints on people’s liberties.

This is the net result of a Eurasian heartland abandoned to local forces, and increasingly overseen by superpowers who see value only in shaping history when they deem it important to their grandeur, and otherwise seem content to simply let things play out, no matter the consequences on the ground.

For now, China might be happy to watch things play out. But, unfettered, these forces are likely to create nothing but misery and a Eurasian backyard in which China will find itself the dominant power watching over chaos.

And while in the short term it might be possible to find some benefit from this situation, in the longer term, it will spill over and ultimately create problems that Beijing cannot just watch from the sidelines.

Raffaello Pantucci is senior associate fellow at the Royal United Services Institute (RUSI) in London

Why China won’t lose sleep over Russian troops in Kazakhstan

Posted: February 14, 2022 in South China Morning Post
Tags: , , , , ,
0

Been very busy with other things of late and have entirely failed to post. As a result a short backlog has accumulated, while some bigger projects and issues elsewhere have kept me rather busy. Anyway: catching up now starting off with a piece for the South China Morning Post on China-Russia relations over events in Kazakhstan at the beginning of the year. Crazy to think how far we have come now with everyone’s attention firmly on Ukraine.

Why China won’t lose sleep over Russian troops in Kazakhstan

Suggestions of China-Russia rivalry for power in Central Asia miss the mark. In reality, while both are active in the region, their roles are more complementary than competitive

Russia is the de factor provider of security guarantees, while China is the economic opportunity everyone wants to tap

The outbreak of violence in Kazakhstan has awakened the question of Sino-Russian competition in Central Asia. The assertion of Russian hard power is interpreted as being an example of Moscow getting the upper hand, to Beijing’s detriment.

Yet this analytical framework is unhelpful in really understanding the situation or the nature of the current China-Russia relationship. Beijing and Moscow have no reason to clash with each other over Kazakhstan. Rather, they will play the situation to their advantage and further freeze out the West from the Eurasian heartland.

China and Russia’s broad interests in Kazakhstan are the same. Both want a stable country that is in their collective economic and military thrall, and ideally with looser ties to the West.

China has the upper hand in economic terms, but this is partially because Kazakhstan is rich in the raw materials needed for the Chinese economy. In contrast, Russian firms see Kazakhstan as a state in which they can ply their trade, and to which they have easier access thanks to the Eurasian Economic Union.

Russian service members disembark from a military aircraft as part of a peacekeeping mission from the Collective Security Treaty Organisation amid mass protests in Almaty and other Kazakh cities, at an airfield in Kazakhstan. This still image is from a video released by Russia’s Defence Ministry on January 8. Photo: Handout via Reuters

Russian service members disembark from a military aircraft as part of a peacekeeping mission from the Collective Security Treaty Organisation amid mass protests in Almaty and other Kazakh cities, at an airfield in Kazakhstan. This still image is from a video released by Russia’s Defence Ministry on January 8. Photo: Handout via Reuters

In strategic security terms, Russia has long had bases in Kazakhstan. The arrival of Russian forces under a Collective Security Treaty Organisation (CSTO) banner is new – both in terms of Russian deployments in Kazakhstan and in a first for the CSTO. But it is not clear how or why this might be a challenge to China.

Beijing has not expressed an interest in deploying its forces in Kazakhstan. China and Kazakhstan have done training exercises together, but these have been limited and done either bilaterally (mostly on counterterrorism questions) or under the auspices of the Shanghai Cooperation Organisation (SCO), of which Russia is also a member.

Beijing has pressured the Kazakh government to do something about dissident networks of Uygurs, and it has in the past sought to get permission for its private security companies to operate in the country. While the Kazakh government was willing to accede to the first request, they were unwilling to let Chinese private security firms in.

None of China’s activity has been about competing with Russia. China is consistently focused on its specific interests in Kazakhstan.

Containers are loaded onto a train to Kazakhstan in the China-Kazakhstan Logistic Base in Lianyungang, Jiangsu province, on September 17 last year. The base is an important seaport for Kazakhstan export and provides efficient transit for cargo and consumer goods from the Central Asian country. Photo: EPA-EFE

Containers are loaded onto a train to Kazakhstan in the China-Kazakhstan Logistic Base in Lianyungang, Jiangsu province, on September 17 last year. The base is an important seaport for Kazakhstan export and provides efficient transit for cargo and consumer goods from the Central Asian country. Photo: EPA-EFE

Where there was a possible overlap in competition with Russia was on military sales, with Chinese firms having sold high-end weapons to the Kazakh government, like drones, some air and missile systems, as well as technological surveillance and communications tools. It is, of course, possible that these arms sales are depriving Russian companies of contracts, but Kazakh purchasing is done on the basis of quality and price, rather than Beijing trying to edge Moscow out of Kazakhstan.

In fact, China is happiest when someone else is dealing with Central Asian security questions. In the immediate fallout from the collapse of the government in Afghanistan, it was not Chinese soldiers or weapons that were rushed to Central Asian borders, but Russian ones.

On the economic side, Russian companies are active in Central Asia, but cannot compete with their Chinese counterparts, whose appetites are on a different scale.

Similarly, the almost bottomless Chinese consumer market is something that Central Asian producers are increasingly keen to have access to. The entire economic geography of this region is being pulled towards China not because of geopolitics, but because of its sheer economic weight.

The “Silk Road economic belt” strand of the Belt and Road Initiative, which cuts through Central Asia, also ties Russia into China’s wider vision of global prosperity. Consequently, Moscow has little interest in complicating it; rather, it is focused on ensuring it benefits as well.

The point being, this is not a competitive relationship. Beijing and Moscow are both active in Central Asia, but are different actors on the ground. Russia is the de facto provider of security guarantees, while China is the economic opportunity everyone (including Russia) wants to tap.

Seeing this through the lens of competition suggests that Beijing would rather be the one who is stepping in to provide security guarantees, and that Moscow is somehow going to push China out economically. There is little evidence in either capital that this goal is in play. Rather, they both seem happy to operate in parallel, playing a supportive rhetorical role and staying out of each other’s way.

Russian President Vladimir Putin gestures during his videoconference with Chinese President Xi Jinping in Moscow on December 15 last year. Photo: Kremlin Pool Photo via AP

Russian President Vladimir Putin gestures during his videoconference with Chinese President Xi Jinping in Moscow on December 15 last year. Photo: Kremlin Pool Photo via AP

The question is in the medium to longer term – when China starts to worry about being dependent on Russian security guarantees.

At the moment, Beijing seems comfortable. But, at some point, this thinking may change. In many other places, China has increasingly started to try to provide its own security guarantees, and there is no reason to think this might not also take place in Central Asia.

On the other side of the coin, the tipping point for Russia is likely to be when Chinese economic investment into Central Asia starts to turn into unfettered Chinese economic influence and power in Russia directly.

But this concern appears to be receding, as Moscow seems to increasingly welcome and open up its economy to Chinese investment and connections – in large part due to tensions with the West.

But none of this is about Kazakhstan. Rather, this is about China and Russia’s larger posturing and view of their respective roles in the world. Within this context, Beijing is happy if Moscow is going to play a role in tidying up what looks like an increasingly messy bout of political infighting in Kazakhstan, while Moscow is pleased to be seen as the regional security guarantor.

In contrast to many other situations involving China, this is a win-win for them both.

Raffaello Pantucci is senior associate fellow at the Royal United Services Institute (RUSI) in London

Time for China to stop hedging its bets in Afghanistan

Posted: August 30, 2021 in South China Morning Post
Tags: , , , , , ,
0

More catching up from what has been a busy period for short pieces. There are some longer ones in the pipeline which will eventually land as well as the book early next week. This was for the South China Morning Post exploring the missed opportunities of China’s engagement with Afghanistan.

Time for China to stop hedging its bets in Afghanistan

  • The flak Beijing has drawn for its Taliban engagement is not just unfair but also misses the point. If China’s Afghan strategy is to be faulted, it’s for doing too little
  • China has the influence and tools – not to mention incentive, as Afghanistan’s neighbour – to take a leading role in fostering peace
Illustration: Stephen Case, South China Morning Post

Now that Kabul has fallen, there is a growing narrative about Afghanistan that China is siding with the Taliban in some sort of nightmarish new alignment. The truth is that Beijing has been engaging with the Taliban in the same way that everyone has.

It is difficult to understand why we should condemn China for meeting publicly a group that the United States had earlier bolstered with meetings and a formal agreement in Doha. And it is not the only one.

Where China could be accused of failing Afghanistan is in not stepping forward to take a more proactive role in fostering an agreement, rather than simply waiting for some resolution to work itself out through bloodshed. As it turns out, this is also an echo of the approach Washington has decided to take.

China’s engagement in Afghanistan and its neighbourhood is not new. It has existed since before the September 11 attacks, growing in fits and starts.

The exaggerated narratives around Chinese potential economic plundering of Afghanistan have not played out as predicted. This, it should be noted, is much to the chagrin of the former government in Kabul, which would have loved to get the tax and investment benefits from the exploitation of the country’s natural wealth.

The Belt and Road Initiative is still a concept in Afghanistan, rather than something tangible. China has strategic and economic investments in almost all surrounding countries, but surprisingly limited investment in Afghanistan.

In Afghanistan, China has largely hedged. It developed relations with the Afghan government and various factions and groups on the ground. It has strengthened its direct contacts with the Taliban rather than relying solely on Pakistan to provide the connections. And it has strengthened its direct and indirect borders with Afghanistan to create a security buffer around the Wakhan Corridor.

All of this is a reflection that Beijing does not trust the Taliban any more than the US or anyone else does.

In direct security terms, Beijing has provided some military aid and support, but not much and largely non-lethal. Chinese views on the US presence have oscillated between a sense of concern that the US had active military bases on its borders to a secret sense of gratitude that the US was fighting a conflict it did not have to worry about.

The one constant in Chinese engagement has been a focus on Uygur militancy, and fears that Afghanistan could be used as a base to strike within Xinjiang. While Beijing’s views about who is supporting these Uygur fighters seem to have shifted over time, and there are questions about the scale and scope of the actual threat, it is an undeniably constant concern that China articulates at every juncture.

This is often its main point of discussion when it focuses on Afghanistan. And it is likely to be the primary concern that Beijing worries about now it has new interlocutors in Kabul.

Beijing has also engaged in multilateral diplomacy of all kinds. It has played a limited role in some of the larger international engagements around Afghanistan, offering some support and money during international donor aid rounds.

It has fostered regional multilateral engagements, and has used Afghanistan as a point of engagement with its adversaries – both Washington and New Delhi, for example, have run training programmes for Afghan officials jointly with Beijing.

And, outside direct engagement, China has tried to get the Shanghai Cooperation Organisation (SCO) to play a more substantial role in Afghanistan. It helped bring the country in as an observer member and fostered the creation of the SCO-Afghanistan Contact Group. What this SCO action might look like in practice is unclear, but it is something that China has continually pushed.

But this also highlights the real failure of Chinese engagement in Afghanistan. Beijing has, sadly, not stepped in to take a more prominent and leadership role when it could have tried and clearly has all the links and tools in place to do so.

Beijing is ultimately going to be Afghanistan’s most powerful and influential neighbour. Pakistan may have deeper ties on the ground, but Islamabad is highly dependent on Beijing and likely to be even more so going forward.

Iran and Central Asia have also made large bets on Chinese economic partnership. China is now going to be seen as the major power across a wide swathe of the Eurasian heartland.

With all these connections, power and influence, China should logically have been a greater leader in Kabul. Admittedly, Afghanistan is a difficult country and China has little experience in conflict resolution of this sort, but it could have been hoped that it would have taken a more proactive role in a country with which it shares a border.

There will doubtless be a certain amount of joy in Beijing as the narrative is advanced that Washington is leaving from China’s neighbourhood with its tail between its legs.

And Chinese officials will seek to play up the idea that this is the end of Pax Americana and a further demonstration of American fecklessness, something they will use in their larger narratives of confrontation with the US. But the US and the West were at least trying to bolster Afghanistan and help it transform.

Pre-eminent in Beijing’s concerns should have been the realisation that, while America may have played a role in making this mess, it is China that will have to live next to it at the end of the day.

Raffaello Pantucci is senior associate fellow at the Royal United Services Institute (RUSI) in London

Why China cannot afford to take a passive role in post-US Afghanistan

Posted: July 1, 2021 in South China Morning Post
Tags: , , , , , , ,
0

Have now come to the end (I think) of the current China-Eurasia writing spell. Next few will likely go back looking at terrorism. The past burst was in part inspired by events (the US withdrawal announcement of Afghanistan as well as the SCO’s 20th birthday) and by the fact that I was doing some revisions on my upcoming book on the topic. This particular piece is for the South China Morning Post, and explores the fact that China has really not stepped into its possible role in Afghanistan. To those who have read other work I have done (everyone of course!), they will know I think this is a role China should be taking and have pushed a number of projects, papers and ideas that try to help this thinking along. Notwithstanding broader concerns around China, it seems to me they should be playing a more positive role in Afghanistan and it is huge loss to the region and Afghans in particular that they do not.

Have not done a media catch up for a while, so here’s a quick sweep. On the China side, spoke to the Guardian about NATO’s China push, to the Straits Times about China-Russia, RFE/RL’s China in Eurasia Briefing picked up my Oxus piece about the SCO’s 20th birthday, The National picked up my comments during the launch of the NATO Defence College paper on Afghanistan and regional powers, and on the terrorism side, spoke to the excellent Lizzie Dearden at the Independent at the end of the Fishmonger’s Hall inquest about ISIS claims, my comments on Maajid’s LBC show were picked up by the Daily Express, and spoke to The National about the big Global Counter-ISIS Coalition meeting taking place in Rome this past week.

Why China cannot afford to take a passive role in post-US Afghanistan

  • There appears to be little evidence supporting Taliban assurances that trouble will not spill over onto Chinese soil
  • China has spent many years hedging on Afghanistan but it needs to take steps to support the government in Kabul and visibly deploy more resources
Afghan militia members join Afghan defence and security forces during a gathering in Kabul, Afghanistan, on June 23. Photo: AP

China appears remarkably sanguine about the growing trouble in Afghanistan. The assumption that a government led or dominated by the Taliban will be a reliable partner is something Beijing has regretted in the past, and could end up ruing again. 

There is some consistency in China’s relations with Afghanistan. Beijing has been unwilling to commit to much, yet has sought to do a lot. Its economic projects have never quite got off the ground, while political mediation efforts have at best added to the noise.

There is no denying the effort, but it would be better if China actually followed through on all its promises with action. Instead, Beijing seems willing to let fate take its course and watch the Taliban come to power.

Media reports have indicated China has received assurances that a Taliban government would be sure to insulate Beijing from problems that might emanate from Afghan territory. China has also made a display of showing support for the administration of President Ashraf Ghani and significant factions within it.

These assurances have been backstopped by an increased security buffer around the Wakhan Corridor, as well as Pakistani assurances of being able to rein in any potential trouble.

Yet, what evidence is there that such assurances have worked in the past? Previously, in 2000, a Chinese delegation visiting Afghanistan, then under Taliban rule, and discovered a large contingent of Uygurs in Jalalabad. They were said to be linked to separatists seeking to strike inside China.

While the delegation appealed to the Taliban authorities to expel them, there is no clear evidence that this happened. Those particular groups may have been moved, but repeated independent reports from other foreign fighters who attended al-Qaeda camps in Afghanistan later on highlighted the presence of Uygurs. 

When presenting its case for the East Turkestan Islamic Movement (ETIM) to be proscribed as a terrorist organisation linked to al-Qaeda in the wake of the September 11 attacks, the Chinese government pointed to the fact the group had launched attacks against China from Afghan bases. 

Since then, al-Qaeda has begun to champion a narrative of targeting China. It has praised Uygur militants for their battlefield actions and sought to harness some of the global anger against China for its treatment of Uygur minorities at home.

This might seem unsurprising, but it is an about-turn for al-Qaeda. In the late 1990s, it refused to even accept there were Uygur militants at its training camps and openly speculated that China might be an ally in its global struggle against the United States. 

There appears to be little evidence of a focus of violence towards China, but this is mainly because there are more attractive targets in the West. Above all, Beijing should be aware that there is little to show the Taliban has recanted or rejected al-Qaeda, or that al-Qaeda has been expelled from its territory.

While the US might be willing to accept Taliban assurances about ensuring violence does not reach American soil or that of its allies, the US intelligence community has also concluded al-Qaeda is no longer a direct threat. Afghanistan is far away, in any case, but China is next door and has a very different stake in this game. 

The current narrative from Beijing seems to be one of accepting the inevitable and blaming everything on America. The US might not have handled the situation entirely successfully but, for two decades, it has invested billions of dollars and used its hard and soft power to improve Afghanistan, something Beijing has profited from.

To simply point to American failings and apportion blame fits a tidy narrative. However, by not offering an alternative, China is failing in its duty as a rising power and also doing little to address its security issues. 

In contrast to 2012, when the US announced a major withdrawal from Afghanistan, it hasn’t engaged with China as much this time. This path was somewhat determined by former president Donald Trump’s administration when he pushed through a decision to remove ETIM from the list of proscribed terrorist organisations.

US President Joe Biden’s administration has followed through on this and, to China’s chagrin, has moved ahead without engaging Beijing on its decisions about Afghanistan. 

So, tensions are understandable, but this should not be the context in which Beijing makes its plans. Rather, China should consider that it now faces an unstable country on its border, which will pose a risk to many of its neighbours.

China has shown an interest in playing a role but never really stepped into it. Milquetoast promises are not going to suffice at this point. China should take on a more proactive role in supporting the government in Kabul and visibly deploy more resources to help out.

China has spent many years hedging on Afghanistan. The time has come to make a play and ensure the long-term stability of one of its most troubled neighbours.

Raffaello Pantucci is senior associate fellow at the Royal United Services Institute (RUSI) in London

How the West can best respond to China’s belt and road

Posted: May 27, 2021 in South China Morning Post
Tags: , , ,
0

Been working on a few too many different projects of late: some large, some small, some with some really excellent co-authors (whom I beg forgiveness for being slow at the moment). As I chug along, penned a short article for the South China Morning Post which tries to set out some ideas on how (and if) the west should respond to China’s Belt and Road Initiative. Not vastly new ideas, but the topic is going to get a lot of airtime during the upcoming G7 session so it seemed the right moment to put the ideas out there.

How the West can best respond to China’s belt and road

  • Competing with China dollar for dollar is pointless as Chinese banks and state-owned firms are driven by different concerns than their Western peers
  • Building up governance capacity in developing countries will help them better manage and push back when Chinese firms step over the line
Illustration: Craig Stephens for South China Morning Post

In a barely veiled reference to the Belt and Road Initiative, the recent Group of 7 Foreign Ministers final communique called on China to end its “coercive economic policies and practices”.

It is not the first time the G7 and its individual members have targeted the initiative, but it is unclear what they would offer instead. Rather, the project has become a whipping boy in the broader geopolitical confrontation with China.

The first thing the West should remember when responding to China’s strategy is that it is not seen the same way globally. While Western countries might view Beijing’s investments in developing countries as exploitative, coercive and attempts to entrap nations in debt, they are sometimes simply the latest round of funding from a wealthy foreign power to come knocking with their own list of requirements.

Some will take China’s strategy at face value and do not care much about the requirements that follow, interpreting them as equal to Western nations’ requirements.

This is a crucial point to consider; while Western powers might attach a certain set of values to Chinese investments, this is not necessarily how they are seen. Most developing countries will accept investment wherever it comes from, and have such deep needs that they will take what appears to be the best value.

That is why competing with China dollar for dollar is pointless.

Part of the reason concerns the institutions involved. Chinese state banks and state-owned firms, often the main implementers of belt and road projects, are driven by a different logic than their Western counterparts. Their considerations centre around activity, employment and continuity rather than short-term profit.

This is not to say they want to lose money, but they are willing to look at projects with a different timeline. They will also, in some contexts, take on a project because the state wants them to. This is not the same for most Western companies, which answer to shareholders.

State-run institutions in China must also take account of the fact the Belt and Road Initiative is a main part of President Xi Jinping’s foreign policy vision and has been enshrined in the constitution. Thus, implementation of the vision is likely to be put above other considerations.

This is also different from in the West, where institutions may have political links, and Western banks might prefer to work with national firms, but there is little binding companies to specific national foreign policies. Rather, most try to avoid overt political links, knowing it can spell trouble.

This highlights a difficult policy area for Western governments. If they want to compete effectively, they have to start considering policies which would clash with the liberal market principles they claim to advocate.

This already happens, but it is often done quietly. Western capitals might need to start being more explicit about it.

One answer is to offer alternatives to critical decisions or infrastructure being targeted as belt and road projects. This is likely to differ from case to case, but the key will be to cooperate with like-minded allies to focus on specific projects.

One idea could be to develop a list of specific areas – no doubt technology would be top. But there is a danger such a list could become unwieldy, especially considering how many areas of society have some technological component. Embassies on the ground could be encouraged to work together, but this would be a complicated process.

A more effective strategy would be to focus on building up the governance capacity in developing countries. This is the real route to success in managing Chinese investment.

For example, rules in contracts for belt and road projects are not always followed or the contracts themselves have exemptions built in.

Chinese companies can fail to perform or implement feasibility studies, find ways around contractual obligations and are sometimes in a hurry to get things done, tending to operate as they are used to doing at home. This can create problems for host countries, which are left to clean up afterwards.

The best way for Western countries to tackle such issues is not by complaining but, rather, to build up local capacity to hold Chinese firms to account. In everything from infrastructure and technical standards to data storage, if the local authorities have stronger powers and capabilities, they will be able to better manage and resist when Chinese firms step over the line.

This recognises what seems the biggest gap in Western thinking. It is true that corruption can sometimes tip the scales, but the answer to that is not more investment, a bidding war or threats about taking Chinese money. Rather, it is empower locals to deal with corruption and ensure local governance can better manage investment.

None of this easy. Many investors, aid agencies and international financial institutions have been trying to do as much for years, which highlights another issue worth remembering.

That is, China does not have a magic wand to make all these problems go away. Arguably, in the belt and road, it has created a tool that could exacerbate issues. So, while China might be able to keep its projects on course for now, that may not be the case indefinitely.

As China becomes more embroiled in problems around the world, it will find itself hitting many of the brick walls that Western powers have experienced over time.

All this highlights why the West should worry less about belt and road projects per se and focus more on strengthening developing countries so they are able to manage whatever investments come their way.

Raffaello Pantucci is senior associate fellow at the Royal United Services Institute (RUSI) in London

Older Entries