Posts Tagged ‘Belt and Road Initiative’

Finally doing some catch up posting as have let things slip for a while. Been somewhat preoccupied with some real-world issues which am still working through. Likely going to see some workflow changes in the future, so watch this space!

But back to the matter at hand, back in early September this chapter emerged at last as part of an NBR publication. The paper was the product of an excellent workshop in Washington that Nadege, Brian, Ed and their colleagues had invited me to last year. The final report is a very interesting one featuring a selection of colleagues and experts writing about China’s growing security efforts along the Belt and Road.

I have reposted the executive summary here, but the whole paper is available to easily download from the NBR website. More on this topic more generally in the pipeline over the next period.

Essay from NBR Special Report no. 80

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The Dragon’s Cuddle
China’s Security Power Projection into Central Asia and Lessons for the Belt and Road Initiative
by Raffaello Pantucci
September 3, 2019

This essay examines how China’s growing security engagement with Central Asia provides a blueprint for how China might engage with countries through the Belt and Road Initiative (BRI) in a similar fashion.

Executive Summary

Main Argument

Xi Jinping’s decision to deliver one of the speeches announcing BRI in Kazakhstan was not incidental. It highlighted the centrality of Central Asia in Beijing’s thinking about the initiative. Consequently, it is useful to examine China’s behavior in Central Asia in some detail to understand better the longer-term consequences of Chinese influence and investment in regional countries under BRI. In the security space, Central Asia has been traditionally considered an area of Russian influence, but over time China has gradually increased its interests using five pillars for engagement: the Shanghai Cooperation Organisation (SCO), training and joint exercises, military aid, military sales, and private security companies (PSCs). Given the analysis of PSCs elsewhere in this report, this essay will focus on the first four pillars in order to better understand the long-term consequences of China’s security engagement in Central Asia and survey options for policymakers seeking to address China’s growing influence.

Policy Implications

  • Chinese security engagement in BRI countries should be understood in a broader context than military sales. Instead, a continuum of security activity should be considered, encompassing training and multilateral engagement as well as military sales. External powers seeking to understand or counter Chinese influence in this space need to engage in a range of security actions.
  • China is investing considerable resources into educating and developing the next generation of security leaders in Central Asia. The longer-term consequences of these efforts may take decades to play out but will likely require a more sophisticated level of engagement from outside powers.
  • The SCO is often considered an impotent institution that has failed to deliver any clear action. However, China and other members appreciate the consistent forum for engagement that the SCO provides, and the forum offers China opportunities to influence the normative space.

Raffaello Pantucci is the Director of International Security Studies at the Royal United Services Institute for Defence and Security Studies in London.

A piece from late last week as part of a short dossier ahead of the Afghan election done for a new outlet of an excellent Italian think tank called Istituto per gli Studi di Politica Internazionale (ISPI). My contribution focused on China’s role in Afghanistan, a common theme which there should be more work on later in the year.

In addition, spoke to Norwegian paper Morgenbladet about Anjem Choudary’s release and the Sun about ISIS in Syria.

18 October 2018

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Afghanistan remains an awkward fit within China’s Belt and Road Initiative concept. Look at most maps of Xi Jinping’s keynote foreign policy concept cutting a route across Eurasia, and they tend to go tidily around Afghanistan. But this masks China’s genuine stake in the country, the gradual shift that is visible in Beijing’s activity and finally, the potential importance of the country to China’s broader push across Eurasia.

Starting with national security, China has increasingly sought to harden its security presence in Afghanistan. But this has been focused for the most part on Chinese national interests, rather than providing broader security support to the country. Beijing has provided funding, equipment and training for Afghan forces in Badakhshan, in Gilgit-Baltistan in Pakistan, and helped build border bases for Tajik forces on their side of the border in Badakhshan. At a strategic level, China has fostered the creation of the Quadrilateral Coordination and Cooperation Mechanism(QCCM) which brings together the Chiefs of Army Staff for China, Afghanistan, Tajikistan and Pakistan. The focus of the grouping the border region around the Wakhan Corridor which all three of them share.

The key to understand this is that China is not seeking to displace the United States or NATO as a key security provider for Afghanistan’s armed forces. The country is focusing on bolstering its links and the capability of the various armed forces that touch upon its border with AfghanistanThis posture focused on Chinese national security concerns can be seen in China’s previous security engagements with Afghanistan which have for the most part focused on building relations with local groups to ensure that China’s security equities – either its nationals and investments or its concerns about Uighur militants using the territory to plan attacks in China – are covered. 

Having said this, there is an equally noticeable gradual increase in China’s activity in Afghanistan. From largely seeing the country as a graveyard of Empires from which it prefers to keep a discrete distance, China has increasingly stepped forwards to play a role in the country. Chinese firms have won some large extractive projects – in the north CNPC won an oil concession in Amu Darya, while MCC and Jiangxi Copper famously won the Mes Aynak Copper mine in Logar. Construction firms like Xinjiang Beixin, CBRC and Gezhouba have all worked on major infrastructure projects in the country. And at the smaller end of the scale, Chinese traders have sought to exploit the gemstones in Afghanistan, while Afghan shuttle traders are a feature of the thriving community of developing world merchants in Yiwu.

And Beijing has actively sought tomend the previous omission of Afghanistan from the broader Belt and Road, hosting conferences in Kabul and Beijing on the topic. At the same time, China has used a multiplicity of regional groupings to bring different regional configurations together on Afghanistan. Large multilaterals like the Shanghai Cooperation Organization, the Conference on Interaction and Confidence-Building Measures in Asia (CICA), and the Heart of Asia (or Istanbul) Process have all seen Chinese leadership try to push different parts of them towards playing a role in Afghanistan. At a mini-lateral level, Beijing has brought together the Afghan and Pakistani Foreign Ministers, and engaged, separately, with the US, India, UK and Germany on Afghanistan.

All of this is a step change from earlier years when Beijing largely kept on the sidelines of any discussion around Afghanistan. To some degree this was part of a general reticence by Beijing to become too involved in any major international entanglements, but it was also a product of China’s habit of abrogating its Afghanistan policy to Islamabad. While Beijing continues to be responsive to Pakistan’s concerns in Afghanistan, it has increasingly struck out its own path. The key turning point can likely be seen in 2014 when Beijing realized that American-led NATO efforts in Afghanistan had a shelf life and were not likely to result in a tidy resolution in Kabul. And while Islamabad could provide some support to advance Beijing’s goals, it did not have total control. The United States instead, was not a continental power. It could eventually up and leave – as a physical neighbour, Beijing was a hostage of geography.

At the same time, the main running narrative from Beijing was one of Belt and Road. There was a gradual build up to this through Xi Jinping’s early years – with a major foreign policy work conference on peripheral diplomacy, a refocusing on Xinjiang and China’s border regions, some major foreign travel to South Asia by leadership figures (including in May 2013 the signing of the MoU that laid the foundation for the China Pakistan Economic Corridor), and finally in September and October 2013 the respective announcements of the Silk Road Economic Belt (in Astana, Kazakhstan) and the 21stCentury Maritime Silk Road (in Jakarta, Indonesia). In 2014, China decided to create a position of Special Envoy for Afghan Affairs, appointing seasoned diplomat and Afghanistan watcher Sun Yuxi to the role.

Yet while the appointment was a clear signal of focus by Beijing, it was made in a manner which seemed to suggest it was adjacent to the broader Belt and Road Initiative. At the time, the concept was still working itself out, so in some ways this was not surprising, but the net result was to create a sense of BRI not necessarily being something which encompassed Afghanistan.

The appointment of Ambassador Sun, however, did demonstrate a level of seriousness by Beijing in terms of trying to understand how to engage with Afghanistan at a more sophisticated level than just engaging with Kabul. The difficulty with a country like Afghanistan for a power like China which is still developing its civil service cadre, is to find individuals who are able to understand countries from the inside and figure out which levers deliver results. In a tribal country like Afghanistan, this problem is multiplied, with local power brokers as significant to guarantee success of projects as the central government. As an Ambassador who had served in the country for some time, Ambassador Sun had a good understanding of these dynamics and good relations across the board on the ground. He was also instrumental in getting Beijing’s efforts are helping try to broker negotiations between the Taliban, Islamabad and Kabul together – playing an important role in the creation of the Quadrilateral Coordination Group (QCG) bringing together China, USA, Afghanistan and Pakistan.

This was not unfortunately always the case with Chinese investments in the country. When CNPC embarked on its project in the Amu Darya region, they did it with a company which was not linked to the local power brokers, causing issues when their engineers deployed into the region to deliver the actual project. 

Over time, Beijing has learned these lessons, and is increasingly seeking opportunities to engage with Afghanistan in new formats and play a slightly more forward role. It has ensured that it has developed a range of relationships within the country amongst all the different factions, but at the same time ensured that it has prioritized strengthening its specific border with Afghanistan to make sure China is protected from overspill of security problems. Currently the focus is largely on bolstering capacity in neighbouring weaker countries (in Central Asia, or parts of Pakistan), while also continuing to show a willingness to talk about playing a positive role in Afghanistan. Beijing’s broader caution, however, remains and the country continues to refuse to take a clear leadership role with Kabul. A posture which is likely to continue until China sees with greater clarity what exact role the United States sees for itself in the longer run.

 

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of the Italian Institute for International Political Studies (ISPI)

And another piece, this time a more recent one for the South China Morning Post exploring reactions to the Belt and Road once again.

Unbuckling China’s belt and road plan will not be easy for Western powers

While the major powers are offering alternatives to infrastructure funding, developing countries are trying to play a stronger hand in negotiating with the Chinese

PUBLISHED : Sunday, 07 October, 2018, 7:32pm
UPDATED : Sunday, 07 October, 2018, 7:32pm

Another op-ed for the South China Morning Post, on a not dissimilar topic to the last two, focusing on the Belt and Road Initiative and its consequences on the ground. It has gotten a bit of attention on Twitter, and the point is to try to challenge the rather empty policy responses we hear about BRI for the most part.

Beyond this op-edding in the SCMP, have also been delinquent in updating media commentary. Since this was last done, I spoke to the Telegraph about a Pakistani Taliban video, the Independent about the fact that Abu Bakr al Baghdadi’s son was killed fighting in Syria, to the Telegraph again about the worrying set of arrests in Germany that included someone who had managed to make Ricin, to Huffington Post about the fact that al Shabaab issued an edict about banning plastic bags, and to the Independent again about ISIS telling its followers to beware of fake social media accounts. Beyond this, The Conversation posted a podcast which included a longer conversation I had had with them about lone actor terrorism as part of the preparation for making this comic strip about the phenomenon.

Why developing countries can’t resist joining China’s massive infrastructure plan

Raffaello Pantucci writes that Beijing’s offer of investment and a connection to a regional ‘balancing force’ is tough to pass up for poor nations with few options

PUBLISHED : Saturday, 07 July, 2018, 10:02pm
UPDATED : Saturday, 07 July, 2018, 10:05pm

COMMENTS: 44 

Raffaello Pantucci

6 Jul 2018

There is an understandable trepidation about China’s Belt and Road Initiative. The problem is, there is a tendency to analyse it solely through the lens of China the adversary, forgetting that numerous countries along the way are affected by this foreign policy initiative and their calculation around China has to be very different.

For them, China the adversary is a second-order issue, often trumped by the necessity of seeking either inward investment or a balancer against other regional powers.

If the world wants to find a way of reacting, countering or engaging with the Belt and Road, this is the chief element to bear in mind. Simply rejecting, shouting about or expecting people to reject China’s massive infrastructure plan will have little impact on Beijing’s foreign policy concept.

China has made a dramatic leap in a few generations. From a developing power facing domestic poverty (which still affects substantial parts of the country), Beijing has leapfrogged its way into globe-straddling gianthood, led by a one-party government which talks in dramatic terms about becoming one of the major powers on the planet.

Seen through the lens of this transformation, the Belt and Road Initiative is interpreted as a way for Beijing to restore itself to its rightful place at the centre of the world, with economic corridors emanating from it in every direction.

And there is some truth to this. The impetus behind the Belt and Road is restoring China to its pre-eminent place on the Eurasian continent. But to simply conclude that this effect is the only one, is to reduce the impact for those along the way.

The Belt and Road cuts across vast swathes of underdeveloped Eurasia and beyond, often through countries which have not benefited in the same way from the prosperity in the West. Their governments have not always been able to match China’s breakneck speed of development, and are instead burdened with fundamental domestic issues which impede progress.

Along comes China, offering loans, companies that can deliver projects rapidly and few value judgments about the governance of the countries in question.

There may be some political pressures, but these initially are kept light, and are often focused on matters that are of relatively marginal concern to the countries at hand: recognition of Taiwan, or willingness to back China in the United Nations.

Over time, this dynamic can change. As countries find themselves unable to repay debt, they will accumulate more.

For politicians there is a deep attraction to an outside power that brings jobs, infrastructure and investment. This is an understandable impulse.

If countries are not receiving this investment from elsewhere, or are finding themselves having to fulfil difficult governance requirements to get loans, it is understandable that they will choose the easy option.

Having got themselves into this hole, finding that their predatory lender is leaning with ever greater intensity on them is familiar to anyone who has found themselves taking on more debt than they can handle from the bank.

What is the lesson here? And what is the policy response from the West?

First, there is clearly a need to call out China’s rhetoric of creating a community of shared destiny.

Beijing cannot necessarily be held responsible for bad choices made by other governments, but there can be no doubt that by letting countries take on too heavy loans that ultimately require them to get bailed out by international financial institutions, China is not helping the international order.

Rather, it is taking money from international institutions which help cover debts incurred by countries that use China’s companies to build their infrastructure. This is reducing the volume of money on the planet to help it develop: hardly the action of a globally responsible stakeholder.

Underdeveloped parts of the world need investment. In the absence of other options, it cannot be surprising they welcome China.

But at the same time, China is also merely offering countries an option they choose to take as other offers are absent or unattractive.

This is the perspective the West needs to take.

If other powers want to really counter Belt and Road in the underdeveloped world, they need to think logically about how to do this. Simply telling powers not to take the investment is unlikely to go far.

Offering them alternatives, either bilaterally, in cooperation with other powers or through international financial institutions, is more effective.

At the same time, such choices can sometimes not be an option. China’s economic firepower can be hard to compete against, and in some cases, there are good reasons why countries have been omitted from international financing.

The carrot of investment can be used as an incentive to change behaviour. There is a paternalistic aspect to this approach, but in these contexts, working closely with local authorities to help them develop the capacity to manage Chinese investment is a more productive way forward.

Helping poor countries develop managerial capacity or helping them take advantage of Chinese investment is more likely to have a lasting effect.

The answer to the Belt and Road needs to be a sensible one. Railing against the system when you are not offering anything else is pointless.

China clearly is taking advantage of some poor countries. But these are underdeveloped parts of the world which need investment. And in the absence of other options, it cannot be surprising they welcome China.

This is the crux of understanding how to respond to the Belt and Road. If you want to marshal a more effective response, you need to answer the need on the ground to which it is responding.

Until you do that, you are merely shouting against the storm.

Raffaello Pantucci is director of international security studies at the Royal United Services Institute (RUSI) in London

Another one for RUSI, this time looking at how the UK should respond to the Belt and Road Initiative. Rather repeats points from previous pieces, but still need to be made. More on this topic in the form of a more substantial piece soon hopefully.

Also, catching up on some other things – this report Understanding the Factors Contributing to Radicalisation Among Central Asian Labour Migrants in Russia which was the product of a longer project we worked on at RUSI finally emerged. It looks at the phenomenon of radicalisation amongst Central Asian labour migrants in Russia. Was the product of a lot of effort, and the final drafting of the paper is heavily owned by my RUSI colleague Mo who took the lead, and Sarah and Nadine who both contributed substantially to both working on the project and drafting bits. Thank you all! Off the back of this, did a Majilis podcast with the excellent Bruce and Muhammad for RFE/RL.

And on the other side of my substantive equation, spoke to the Intercept about the far right terror menace in the UK, and to Voice of America about the Liege terror attack today.

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China’s Belt and Road Initiative: A Call for Pragmatism

Raffaello Pantucci
Commentary22 May 2018
ChinaInternational Security Studies

China’s Belt and Road Initiative requires a logical response, one based on an assessment of realities rather than rhetoric, and reciprocity, rather than outright confrontation.

There has been little clarity of the UK’s approach to the Belt and Road Initiative (BRI) since the prime minister’s visit to Beijing in January. The key message to emerge from the visit seemed contradictory: the UK claimed to be ‘a natural partner’ for the BRI, but at the same time, Prime Minister Theresa May refused to sign a memorandum of understanding for the initiative presented by Chinese leaders. But this is a comprehensible paradox. The UK is facing the same conundrum posed to most countries: Chinese investment is attractive, but the norms and political pressure that may follow in the wake of this grand initiative are not.

The key to properly responding to Beijing’s economic statecraft under the BRI is clarity. The foreign policy concept advanced by Chinese President Xi Jinping is the latest expression of China’s ‘going out’ policy; it provides the overarching logic for Chinese external investment. The BRI narrative is one that has grown over time to overwhelm Chinese foreign policy; almost any external engagement that China engages in can be captured in some way under the BRI.

The first point worth remembering is that just because China talks of the BRI in grandiose uniform terms, this does not mean other countries need to be engaged with it as a single project. For European powers, for example, it is abundantly clear that there is a vast difference between Chinese projects in Europe, and projects in faraway parts of Asia. The BRI concept is an overarching foreign policy idea best understood as a series of distinct projects. And, as with any large set of projects (or foreign policy goals laid out by a foreign power), some elements have a natural logic of cooperation to them, while others do not.

Secondly, it is essential to understand what is actually happening on the ground, since there is much rhetoric and sometimes little action when it comes to the BRI. There are numerous examples of mismatched expectations throughout Central and Eastern Europe. The much vaunted 16+1 format (China plus the former communist countries of Central and Eastern Europe) has delivered little in terms of solid investment; the Czech Republic has found itself facing a sudden massive loss of prospective investment as Chinese energy conglomerate CEFC withdrew abruptly from its push into the Czech market. By contrast, Pakistan is abuzz with activity, as Chinese companies build new infrastructure up and down the country.

The moral of these contrasting episodes is, therefore, to focus on what is happening, not on what is being merely discussed or announced. For, while this is an obvious point, it remains far too easy to get caught up in the noise around Chinese projects and miss what is actually going on. It is also too easy to fall for the other stories that such mega-projects generate. Some stories – such as allegations that Chinese prison labour is being used to implement infrastructure projects – are untrue, while others – such as claims that some countries are taking on onerous debt burdens alongside Chinese projects – are true. But even then, the debt burden story is nuanced. For example, the terms offered by the Export–Import Bank of China or the China Development Bank are sometimes favourable, but there are also genuine questions about the financial liabilities of some projects once they are up and running: see, for instance, the controversy over the sizeable obligations that the government of Pakistan has assumed in guaranteeing revenue for the many Chinese-financed and executed electricity generating projects in the country.

Finally, there is the broader ideological question posed by the BRI. As Western values of prosperity through democracy are being increasingly questioned by Western publics, and governments themselves, Beijing is offering an alternative worldview underpinned by norms and standards that do not necessarily conform with Western outlooks. Yet even on this point, the debate needs to be focused on a case by case basis. The relatively new Asian Infrastructure Investment Bank (AIIB) that elicited such a great controversy in the West was in part a response to a perception among countries of the global south that the dominant international financial institutions did not represent their interests or give them a voice. The AIIB is a product of these considerations as well as an attempt by Beijing to try its own hand at operating international structures that are not Western-invented. In sum, far from being a parallel or disruptive player, the AIIB could be seen as representing a positive Chinese-led contribution to the international order.

In contrast, China’s push to advance its version of the internet to strengthen models of state control, or its attempts to use its economic weight as a coercive tool, remain to be contested. But the key to any such response is strengthening alliances to confront patterns of behaviour from Beijing – either under the auspices of the BRI or otherwise – that are against national interests or those shared throughout the West. Beijing may resist, seeking ways to circumvent such opposition, but this is the natural push-and-pull of international affairs. The key to guiding a response is to offer alternatives and to think about what could address the issues on the ground that Beijing is seeking to resolve through its investments. In other words: if the UK is concerned with a project being undertaken by a developing country under the BRI, they should find ways of engaging with that country to either agree upon alternative sources of investment or to ensure that the Chinese project is delivered to an acceptable standard and that it will deliver maximum local benefit.

This lesson is broadly applicable. The West should focus on engaging with segments of the BRI that are empirically underway, and should engage with local partners to ensure they gain real benefits. The idea that the BRI could be a source of massive profit for UK companies based globally is a view that needs tempering. UK companies in Beijing are already making money accompanying their long-standing Chinese partners as they pursue the BRI. The broader profit is more likely to come from taking advantage of the infrastructure investment that is taking place, and finding ways of ensuring that the countries receiving BRI investment are able to grow in its wake.

The key point to remember within all of this is that the Chinese companies and banks making deals under the BRI are focusing on their own interests; they will expect everyone else to do the same thing.

Finally catching up on some very old posting. Here is a piece on China for the Telegraph, was intended after the 19th Party Congress. I will catch up on other posting later.

Can China avoid an armed confrontation with the West?

Chinese soliders

China is moving towards shedding Deng Xiaoping’s famous maxim about hiding its strength and biding its time. President Xi Jinping’s bold statements during his 19th Party Congress speech last week spoke of a China rising to fill its role on the global stage.

The difficult question for the West is: how will this newfound confidence be expressed in China’s posture on the world stage? And how the rest of the world will have to interact with it?

China’s rise as a military and security power is not a new story. From a third-rate military force in the 1980s, the People’s Liberation Army has transformed itself.

Xi Jinping’s administration has stepped this up through an intensive process of reform that is giving it doctrines and approaches that are competitive with some of the world’s most effective militaries.

China is also expanding its military footprint. We can see this from the establishment of new forward bases, like in Djibouti on the Horn of Africa, or through port visits, such as the appearance of Chinese submarines in Sri Lanka.

On land, Chinese peacekeepers are being deployed with increasingly dangerous mandates, something reflected in losses on the ground in parts of Africa.

In military sales, China has leapt up the rankings to become the world’s third largest weapons vendor at around $9.1 billion, according to estimates by SIPRI.

But is this surprising? China will soon be one of the world’s largest economies, with investments and interests all around the globe. It makes sense for it to develop a hard power capability to protect its interests and people as they go out under the auspices of Xi Jinping’s keynote “Belt and Road Initiative”, which aims to build a series of land and sea trade routes across Asia.

The dilemma for China is whether this role is one which will complement or compete with the activities of the West – and the United States in particular. The American political scientist Graham Allison believes all rising powers face something called the Thucydides Trap, in which their rapid improvement brings them into inevitable confrontation with an established power which fears replacement.

In reality China’s foreign policy is complex, containing three strands with varying degrees of aggression:

1. China often cooperates with the West

In Afghanistan it has worked closely with the US and Germany on joint training missions, providing training for Afghan security forces, and facilitating negotiations between the Taliban and the Afghan government in Kabul. This clearly matches with western interests.

2. China sometimes passively opposes the West

In Syria the US and most of Europe has taken against the Assad regime, against Isil and alongside the Kurdish forces. By contrast, Beijing has thrown its weight firmly behind Assad, and is supporting the fight against Isil only with the proviso that it is ultimately the regime (supported by Russia and Iran) that will bring stability and security back to the country.

The running theme through all of these situations is that China is protecting its own interests. This is quite natural, but an accidental war would be in nobody’s interest. So far, tensions like these re mostly restricted to border countries where China feels it is not being expansionary but merely protecting its homeland.

A bigger dilemma will present itself when China decides to undertake a more aggressive action in some foreign field where it has no direct border dispute but isprotecting its interests or nationals. In this context, what will be the Western response – to support or condemn?

It is not clear we are anywhere near this situation yet, but clearly Beijing has started down a path of preparing itself for such an eventuality. The question at that stage will be whether the West agrees and supports China’s activity, or whether Beijing is seen as an aggressor that requires confrontation.

There is no clean answer to this question. And nor is it clear whether and when it will be faced. But there is no doubt that China is rising as a global power and has a growing military and security footprint to accompany its mighty economic machine. How the world manages this will be one of the defining questions of the next decades.

More late posting, this time on China’s posture with regard to international terrorism for the South China Morning Post. Am also catching up on some media appearances over the past couple of months. Spoke to the LA Times, AFP, and Washington Post about the Finsbury Park attack. To the  New York TimesNewsweek, Financial Times, Guardian, and Ireland Herald about the London Bridge attack. To the New York Times about ISIS long distance direction. On the broader question of the current threat picture and UK history with The TimesObserverBloomberg, the Australian, and Newsweek. And finally, on the difficulties countering online terror and European sharing with the Washington Post and US News Report. More on this final topic to come in an interesting new format soon. And absolutely finally, on the other side of the coin, about the Belt and Road causing frictions between China and Russia for RFE/RL. As ever a lot more on this to come soon as well (including a very substantial couple of new pieces).

‘Why China must do more to fight international terrorism’

China is increasingly becoming a target for militant groups, but by cooperating more with other countries Beijing can help combat the threat, writes Raffaello Pantucci

PUBLISHED : Sunday, 09 July, 2017, 2:03pm
UPDATED : Monday, 10 July, 2017, 2:49am

A darker side to China’s Belt and Road Initiative is starting to reveal itself.

As China’s profile rises and its investments and interests globally grow, China is finding itself in the terrorists’ cross hairs. This means Beijing needs a more considered counterterrorism policy with greater international cooperation.

Back in July 2015, the Islamist militant group al-Shabab launched an attack on the Jazeera Palace Hotel in Mogadishu, Somalia. Apparently revenge for an assault by Ethiopian soldiers that killed civilians, the attack also happened to hit the Chinese embassy in the building, killing a security guard.

Al-Shabab was reminded of the impact of its action in a message from the Turkestan Islamic Party, a Uygur jihadi group that China has blamed for a series of attacks in its western region of Xinjiang. It sent a message saying: “We the mujahideen in the Turkestan Islamic Party congratulate the Islamic Ummah for this blessed operation, we endorse it and we encourage the Shabab al-Mujahideen Movement in Somalia to carry out more such jihadi operations.”

But there was little evidence that the group had meant to target the Chinese embassy.

Just over a year later, another Chinese embassy was hit by a terrorist attack. This time a suicide car bomber crashed through the gates of the embassy compound in Bishkek, Kyrgyzstan, before detonating explosives in the vehicle. The damage was limited, although local employees were hurt. But the attack this time was far more targeted. Nobody claimed responsibility, but reports strongly suggest the attack was linked to an Islamist militant group operating in Syria. What was not in doubt was it clearly targeted China.

This shift comes after a period when China could relax as a second-order priority for international terrorist groups. While al-Qaeda and others would occasionally issue threats to China, it was not clear that they were dedicating material resources to target Beijing or its interests. The principal link China had to international jihadist networks was the militant Uygur community angry at Beijing’s domination of Xinjiang. Some were connected with international jihadi networks. Yet this group was largely seen as weak and not one that could command much more from the international jihadist community beyond rhetorical statements.

Turn to today, and as China reaches out to the world through President Xi Jinping’s belt and road plan, Beijing is becoming more of a terrorist target.

Many of these forces intersect in Pakistan, where large-scale infrastructure investment into the conflict-prone country is directly exposing Chinese interests and citizens to the dangers of armed groups. In part, this is a product of China’s support for the Pakistani state – the main target of many Pakistan-based groups. But it is also a result of China’s ongoing problems in Xinjiang and an angry Uygur minority who are finding more active support in the international jihadist milieu. Recent statements by Islamic State and other militant groups in Pakistan link strikes and anger against China to their treatment of Uygurs.

But what can China do about this? In the first instance, Beijing needs to find some way to resolve its problems in Xinjiang – letting the situation fester there is not going to improve China’s standing in the eyes of the international jihadist community. Looking abroad, Beijing still officially stands behind its sacred principle of non-interference but it is clearly starting to build a legislative framework to provide a mandate for its forces to go out into the world and protect its national interests. This can be seen in new counterterrorism and intelligence legislation. It is also apparent in the People’s Liberation Army’s growing assertiveness and international presence – be it more aggressive peacekeeping mandates, overseas bases, or growing direct military support for countries dealing with militant groups at home.

Yet there is more that can be done. China continues to be a hesitant player in international cooperation. This is in part the product of a lack of trust and different views on the root causes of terrorist problems, but there are a number of places around the world where China and the West share a common threat.

Sharing assessments and specific intelligence linked to respective national interests is one cooperative way forwards, but these both need to be two-way streets. Historically, China has acted in a more passive manner in such engagements, taking information without giving much in return. More could also be done to think through the impact of support for government forces on the ground – in particular to make sure there is a greater level of common effort in this direction.

For example, coordinating support to the Philippines as it deal with its growing problem with militants. Currently, numerous powers – both Western and Asian – provide support for the Philippine government. Making sure this support is complementary and that both sides are highlighting the same problems to the Philippine government is key in establishing long-term stability in the country.

International terrorism is a common problem facing the world. While there are always going to be disagreements and difficulties in countering these threats, there are some things which can be done together.

China can no longer hide in the shade of terrorist groups’ desire to strike primarily at the West. As it expands its international footprint, it is going to be increasingly exposed and will need to build relations with friends around the world to manage this growing menace effectively.

Raffaello Pantucci is director of international security studies at the Royal United Services Institute in London

Back on my China in Eurasia theme, this time a piece timed to land at my institutional home RUSI to coincide with the big Belt and Road Forum taking place in Beijing. Lots more on this topic to come, and if you want more have a look at the China in Central Asia site.

Separately, spoke to the Times about returning foreign fighters to the UK from Syria, to Politico about Brexit and counter-terrorism, and the Mail on Sunday about Khalid Ali, the arrested Westminster terror plotter.

China: Understanding Beijing’s Belt and Road Initiative

A great deal of rhetoric is expended over China’s gigantic investment initiatives. Still, many of the economic projects are real, and Western governments will be well advised to understand their purpose.

The Middle Kingdom is asserting its centrality in global affairs by hosting the Silk Road summit this weekend. Aimed at showcasing President Xi Jinping’s ‘Belt and Road’ vision, the conference will bring together leaders, officials and experts from around the world.

Apart from the signing of some large deals and some affirmations about China’s eagerness towards free trade, the summit’s real importance is in the message it sends about China’s place in the world.

First announced in 2013 in a set of speeches in Astana and Jakarta, the One Belt, One Road (now renamed the Belt and Road Initiative) is at its root about putting a new name on a series of initiatives that built on existing Chinese investment and trade relationships.

The decision to first focus the initiative on Central Asia was a reflection of the fact that the region served as a conduit for China’s decades-long approach to investment around the world.

With a model of building infrastructure using Chinese firms deployed to deliver on loans provided by the country’s financial institutions to open up trade and markets, Beijing’s investments in Central Asia since the end of the Cold War provide a model for the globalised Belt and Road Initiative.

For countries along the routes, there is the difficulty of understanding and connecting with the Chinese investments in a manner that is useful to them, so that they are not simply roads passing through their territories.

For outside powers, such as the UK, there is the challenge of comprehending where they sit in the broader vision, as well as how they can connect with these projects along the routes.

To understand these issues better, there are three key aspects to remember. First, the concept is not a monolith. Each of the strands of the Belt and Road are different; at different stages of development, advanced to differing degrees and of variable importance.

In some cases, China is building on a long history of investment, while in others China is starting from a very low base of investment. It is important to distinguish between the rhetoric and the reality in each case.

Second, it is important to remember that this is not a giant aid project; China is making commercial investments in many cases. In some, the loans have been offered at reasonable rates and the implementing partner is contractually obliged to be Chinese. Looking at the Asian Infrastructure Investment Bank projects, they are in fact put out to open tender.

It is only in very few cases that the investment being offered acts as pure aid. China is still developing its aid profile, and this is key in understanding what China is doing under the Belt and Road.

The ultimate aim is to develop a series of trade and economic corridors using Chinese companies (thereby helping them go out into the world) to help China develop domestically. This is fundamentally a selfish vision aimed at advancing Chinese interests.

Third, it is important to think of the vision with a longer horizon that we are used to considering. At the moment, there is little economic logic to placing goods on trains from China to go to Europe: the route is far more expensive than going by sea and the highest value goods that need to get across land quicker need to travel by air.

Consequently, the much-vaunted trains which are travelling across the Eurasian landmass bringing goods between Europe and China are for the most part going full one way and empty back.

Furthermore, they are being subsidised by Beijing or the regional governments from where they depart. They do not currently make economic sense.

But it is possible that this is looking at them on too short a timeline. Seen from Beijing, the idea is to lay these tracks and develop these routes so that once China’s western regions become more developed and productive, they can take advantage of these routes.

Over time, what seems a short-term loss may turn into a longer-term artery of international trade. The point is that it is possible that the horizon with which the Belt and Road is currently considered is too limited.

In fact, it is something with a much longer timeline and is fundamentally, seen from Beijing, about re-establishing China as the centre of a global network of trade and economic routes that will help re-wire international trade.

These three elements are essential to bear in mind when outside powers are seeking to connect with the vision. It is important to understand each corridor in detail, to focus on the commercial opportunities that the corridors will create and to think with a longer horizon that most governments usually consider.

Once this learning has been absorbed and considered, it will be easier to understand how to connect with China’s vision – something that is as relevant to countries such as the UK at one end of the route as those that are along the routes.

For the Chinese investments are happening, notwithstanding the hyperbole that will be on display this weekend; money is being spent, and ground is being broken.

Banner image: The first goods train service from China to the UK arrives at DB Cargo’s rail freight terminal in Barking, East London. Courtesy of PA Images

New piece for the Financial Times excellent Beyond BRICS blog, this time providing an evaluation of the links between the Asian Infrastructure Investment Bank (AIIB), the Silk Road Fund and Xi Jinping’s ‘Belt and Road Initiative.’ A lot more on this general topic on my parallel China in Central Asia site. This aside, spoke to the Telegraph about the recent terror attack in Quetta, Pakistan.

China’s Development Lenders Embrace Multilateral Co-operation

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There has been much speculation on the role of the Silk Road Fund (SRF) and Asian Infrastructure Investment Bank (AIIB) in China’s outward investment push.They are both instruments created by Beijing to provide economic firepower and bring international credibility to the ‘Belt and Road’ vision that has become President Xi Jinping’s keynote foreign policy concept. But in reality they have both undertaken a series of investments that, while substantial and linked to ‘Belt and Road’ countries, pale in size next to China’s overall outward investments.

While the AIIB has quite clearly been subsumed into the ‘Belt and Road’ project, the SRF has so far largely focused on commercial projects which are focused on profit rather than national strategy.

AIIB has so far made two sets of project announcements. The first were announced on June 24, 2016 and included a $165m loan for a power distribution project in Bangladesh, a $216.5m loan co-financed with the World Bank for a national slum upgrade in Indonesia, a $100m loan co-financed with the Asian Development Bank (ADB) and UK’s Department for International Development (DFID) to finance the Shorkot-Khanewal section of the M-4 motorway in Pakistan and a $27.5m loan for the Dushanbe-Uzbekistan Border Road Improvement Project in Tajikistan, co-financed with the European Bank for Reconstruction and Development (EBRD).

A second set were announced in September, including a $300m loan for Tarbela 5 hydropower project in Pakistan, co-financed by the World Bank and a $20m loan to finance a 225 MW power plant in Myanmar, a project which is set to possibly receive a further $58m from the International Finance Corporation (IFC) and $42.2m from the Asia Development Bank (ADB).

Of these projects, the only one that is uniquely funded by the AIIB is the power grid project in Bangladesh. All of the others are co-financed, or more accurately, the AIIB has bought into existing projects. Another significant detail is that with the exception of the Indonesian project, all of the projects are ones that can be captured under the broader ‘Belt and Road’ vision – which has three principal strands pushing out across Eurasia: China-Pakistan Economic Corridor (CPEC), Silk Road Economic Belt (SREB), and Bangladesh-China-India-Myanmar Economic Corridor (BCIM).

Of the $829m the bank has invested so far, $400m has been invested into projects which fit under CPEC, $27.5m into SREB, and $185m into projects which could fit under the BCIM.

In other words, almost 75 per cent of the AIIB’s first projects have been steered towards existing Chinese economic visions. And in many ways, the Indonesian project could also be captured under this banner, given the fact that Indonesia fits into the under-developed 21st Century Maritime Silk Road concept as well (and was the country in October 2016 that Xi announced the concept in the first place).

There is very little distance between the AIIB and Beijing’s ‘Belt and Road.’ And in fact, the parts of the ‘Belt and Road’ it is feeding are those parts which are going to ultimately have a resonance on China’s most under-developed regions that are the ultimate focus of the ‘Belt and Road.’ It is therefore hard, on the basis of its first projects, not to consider the bank as a tool of the ‘Belt and Road’ rather than a new independent financial institution advancing general regional development goals.

The Silk Road Fund is a more obvious tool than the AIIB. With a total capital of $40bn, the first $10bn was made up with money from the Chinese State Administration of Foreign Exchange (SAFE), which accounted for 65 per cent of the initial funds, Export-Import Bank (accounting for 15 per cent), China Development Bank (accounting for 5 per cent) and the China Investment Corporation (accounting for 15 per cent).

Established specifically to ‘promote common development and prosperity of China and the other countries and regions involved in the Belt and Road Initiative,’ the Fund is a commercial entity that is focused on projects that will generate returns.

Having laid out this logic, the Fund’s first investments have followed these principles, starting with an investment of $1.65bn in April 2015 to build the Karot hydropower project in North East Pakistan.

In September 2015 it announced it would purchase 9.9 per cent of the Russian Yamal liquefied gas field for $1.2bn, and more recently it was revealed it had explored putting almost $2bn into buying Glencore’s Vasilkovskoye gold mine in Kazakhstan.

It ultimately lost that deal to another pair of Chinese buyers. Outside these obvious ‘Belt and Road’ deals, the Fund has also invested in ChemChina to purchase Italian tire maker Pirelli, invested $100m into the China International Capital Corp (CICC) a state investment bank that prior to its initial public offering (IPO) in November 2015 was seen as taking losses internationally, and finally pledging some $300m to the IPO of China Energy Engineering Corp (CEEC) an international power plant construction firm.

To understand the ‘Belt and Road’ logic of the CEEC-Silk Road Fund investment, it is instructive to look at Mr Xi’s visit to Serbia in June 2016, seven months after the IPO announcement. Mr Xi was present at the signing of an MOU between the CEEC, the Silk Road Fund, China Environmental Energy Investment Ltd and the Serbian Ministry of Energy and Mining. The MoU laid the foundations for CEEC to undertake further energy projects in Serbia, joining already advanced CEEC projects in Lithuania and Bosnia-Herzegovina.

Taken as a whole, the Silk Road Fund is a heavier investor in ‘Belt and Road’ projects than AIIB. While the AIIB’s announced deals add up to $829m, the SRF’s amount to at least $3.25bn (not including the Pirelli deal, the exact numbers of which are not immediately available). In addition, the Fund has been reported as considering an investment of between €5-10bn into the European Fund for Strategic Investments, or the so-called Juncker Plan.

But all of this pales next to China’s overall outward investment numbers. The Ministry of Commerce announced outward investment last year at $145.67bn and EY, a consultancy, has predicted that this year’s total will surpass $170bn.

Taken against this background, the SRF and AIIB are clearly minnows. But they are minnows which have focused on national interest, something that highlights the degree to which the broader ‘Belt and Road’ is aimed at advancing national interest rather than being a benevolent vision for Eurasia.

It also illustrates to outsiders that to properly understand how to connect with the ‘Belt and Road’, there is a need to understand China’s broader international ambitions under the vision.

Raffaello Pantucci is director of international security studies at RUSI, a think tank based in London.