Posts Tagged ‘BRI’

More catch up posting now from the previous few weeks. This one was written a little earlier, but ran in Nikkei Asian Review just as Kabul fell after excellent editor Jason pushed it through to be timely. Written in irritation at the overinflated narratives that kept emerging in the wake of Taliban visit to Tianjin, it attracted a surprising amount of attention and generated a lot of subsequent media hits which I post in due course. It is a topic which I have covered a great deal in the past, and is likely to become more relevant as time goes on. There is a whole chapter on China in Afghanistan in my upcoming book, which I have finally seen some draft covers for which is exciting. More on that in due course!

The myth of Chinese investment in Afghanistan

Little evidence that war-torn country is a strategic priority for Beijing

Taliban fighters take control of Afghanistan’s presidential palace in Kabul on Aug. 15: they are certainly not Beijing’s preferred choice.   © AP

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

Among the many overblown narratives bouncing around amid the chaos of the Taliban victory in Afghanistan is the notion that China is champing at the bit to sweep in and pluck the country’s economic riches once the country has been cleared of its Western impedimenta.

There is no doubt that Beijing’s companies will look at some of the resources in Afghanistan as potential opportunities, but there is little evidence that this is a strategic priority for Beijing. China has played a surprisingly limited economic role in Afghanistan until now, and it is hard to imagine this is going to abruptly change in the face of instability implicit in the wake of the Taliban takeover.

Up until now, Beijing has been able to maintain good relations with both the Afghan government and the Taliban at the same time, and both sides recognize that whoever ends up in charge, China will still be their neighbor. And as the world’s second-largest economy, it is clearly a relationship they hope to benefit from.

This narrative is not new. The Taliban doubtless recall that their own earlier minister of mining was in a meeting with a Chinese delegation in Kabul when the Sept. 11 attacks took place in 2001. Afghans in general been encouraged by the fact that the biggest putative bilateral investment projects in the country since the U.S. invaded have been Chinese.

In 2007, the Metallurgical Corporation of China and Jiangxi Copper won a contract to develop and exploit a copper mine in Mes Aynak, while in 2011, Chinese energy giant China National Petroleum Corp. won a tender for an oil field in Amu Darya in the north of the country, sparking hopes that this might finally bring a measure of economic independence.

Yet the two projects have since stalled, with the Afghan government taking back the Amu Darya concession, while Mes Aynak has become a byword for broken Chinese dreams in Kabul. In both cases, the much-vaunted agreements for all ancillary infrastructure — a railway line, power station and refinery — never materialized.

There is no doubt that Afghanistan’s mineral riches would be attractive to Chinese companies on the lookout for untapped resources to feed insatiable domestic demand. Yes, Chinese companies may have a higher risk tolerance than some of their Western counterparts, but in the wake of two big project failures, why would a potentially more unstable Afghanistan suddenly be more attractive? Beijing might be in discussions with the Taliban, but China has little reason to force its companies into the country.

When it comes to infrastructure, Chinese investment in Afghanistan is also limited. There has been some hospital construction, housing in Kabul, several small-scale factories and some new buildings for Kabul University — and possibly a military base in Badakhshan — but connectivity infrastructure such as roads, bridges, rail and ports has been in short supply.

Chinese construction companies have built roads and more in Afghanistan, but most of this has been done through international institutional financing, rather than being driven by Beijing. Chinese contractors have won competitive bids and delivered them under dangerous circumstances.

As for extending President Xi Jinping’s signature Belt and Road Initiative, the little that has been advanced has been mostly rhetorical or just concepts floated by Beijing to connect the China-Pakistan Economic Corridor with Afghanistan. But as far as it is possible to tell, little economic energy or effort has been put into turning this into reality. Beijing has refurbished some border posts to facilitate the transit of goods between Afghanistan and Pakistan, but this is certainly not the weighty economic infrastructure projects being advanced in Pakistan or North and Central Asia.

The one thing that the Chinese Embassy in Kabul has focused its attention on recently is pine nuts, celebrating the creation of an air corridor to facilitate their export to China. While such opportunities are to be encouraged — they create lots of jobs in what is still a heavily agrarian society — this is hardly a game-changer.

Pine nuts bound for Shanghai are loaded into a Turkish Airlines aircraft at Kabul’s Hamid Karzai International Airport in November 2018: such activities create jobs but are hardly a game-changer.   © Afghan Presidency Press Office/Anadolu Agency/Getty Images

None of this is to dismiss China’s aid efforts in Afghanistan. The key point is that aid has been limited, with the few substantial achievements tending to be driven by Chinese companies and entrepreneurs operating on their own. Notwithstanding serious and high-level Chinese engagement, the Mes Aynak project remains in limbo, suggesting a limit to how far China wants to force its companies to operate within the country.

Moreover, all of this took place while the country was at least substantially under the command of a government that possessed a degree of international accountability and expertise. While past experience has shown a willingness by Chinese companies to engage with the Taliban, they are certainly not Beijing’s preferred choice. The assurances that Chinese investors would need to proceed further will likely take some time to materialize.

The sad truth is that China is a missed economic opportunity for Afghanistan. And there is little chance that the instability that will follow a Taliban takeover is going to change that.

It is a big week for Eurasia, though much of the attention is focused on President Biden’s Europe trip. In parallel to his visit to NATO, the G7 Summit, a meeting with President Putin and more, a number of other things are happening – most curiously from my perspective the SCO is turning 20. More on that later. First of all though, a paper on China in Afghanistan for a NATO Defence College paper edited by excellent colleagues Aniseh and David. This was initially written a little while ago, and has had some updating as we have gone along. I think its has managed to stay accurate given the constantly changing events on the ground, but it is surprising to me how little attention Afghanistan has been getting during the NATO Summit. Something that really reflects the total disinterest that you now find about staying in country. More on that topic to come as well.

China

What China wants

China has taken a largely neutral view on Afghanistan, repeatedly calling for all sides to agree and for violence to de-escalate. It has sought to engage with Afghanistan through multiple regional and global formats, never taking a leadership role while carefully cultivating relationships with every side of the conflict – including the Taliban with which it brokered informal talks in 2015.144 It seems that Beijing is fairly ambivalent about who will ultimately come to power in the country, though it would likely prefer not to see the Taliban solely dominant.

China’s public passivity might reflect a genuine expression of Beijing’s view on the Afghan Peace Negotiations (APN) and the end state in the country. It has not taken any public position on the APN beyond stating its support for any Afghan-led and Afghan-owned discussion.145 In December last year, Foreign Ministry spokeswoman Hua Chunying said, “We hope both sides of the Afghan peace talks will put the nation and people first, act on the people’s will, meet each other halfway and reach consensus on peace as soon as possible. China will continue working with the international community to play a constructive role in this process.”146 This has been the official line delivered consistently, with a different MoFA spokesman (and former Deputy Chief of Mission to Islamabad) Zhao Lijian stating in March, “China calls on the Afghan Taliban and all parties in the country to grasp the opportunity to start the intra-Afghan negotiations as soon as possible, and to negotiate for political and security arrangements acceptable to all so as to realize lasting peace and stability of Afghanistan.”147 When the APN started in September, Foreign Minister Wang Yi sent some opening remarks calling for all sides to agree,148 and special representative Liu Jian later visited Qatar.

This neutral expression towards the talks masks the fact that Beijing places much of the blame for failure on the talks with the US, whom they see as posturing and refusing to acknowledge the outsized role they play in the problem. China believes the US has a responsibility to resolve the issues in Afghanistan. These are the very same issues they have contributed to creating, and Beijing does not see much chance of success.149 More recently, a more aggressive tone has crept into China’s commentary about the US role in Afghanistan. In a late March 2021 MoFA Press Conference, Spokeswoman Hua Chunying played a video in which Lawrence Wilkerson, former Chief of Staff to Secretary of State Colin Powell, spoke of how the US’s decision to invade Afghanistan was part of a Central Intelligence Agency (CIA) plan to develop assets to attack China from within in Xinjiang.150 Such rumour has long circulated in Beijing, but its elevation to official discourse by the MoFA shows a willingness to far more aggressively confront the United States in Afghanistan. It closes the door on possibilities for cooperation, while also potentially signalling that Beijing may view NATO’s operations in Afghanistan with more hostility than previously. A leaked intelligence report in December which suggested that Chinese agents were offering bounties for American casualties in Afghanistan is an example of how this souring narrative can drag Afghanistan into the heart of the US-China clash.151

The advent of the Biden administration does not appear to have changed the trajectory of US-China relations, and arguably it has been getting worse. Many of the key figures in the new American administration are individuals who had previously worked in the Obama administration and helped shape the cooperation between China and the US in Afghanistan. And while there are suggestions that Afghanistan could lend itself as a useful platform for cooperation between the US and China152, this seems unlikely this time around. The steps taken by the outgoing Trump administration might have sealed the conflict with China. Some of these have direct salience to Afghanistan – for example, the decision to remove the East Turkestan Islamic Movement (ETIM) from the list of proscribed terrorist organisations. In Beijing’s eyes, the US is negating the existence of China’s primary concern in the country: Uyghur militants and affiliates’ activities in Afghanistan.153 By raising the spectre of US manipulation of Uyghurs to attack China from within, Beijing is linking Afghanistan to its core domestic security concerns in Xinjiang – something which has also become a focus of US sanctions towards China. Afghanistan has thus now been tied to the very heart of the US-China confrontation.

The US decision to withdraw its military forces from Afghanistan is unlikely to have much direct impact on Chinese behaviour in Afghanistan. China has for the most part developed a complicated set of tools to help hedge against what it perceives as its direct security threats from Afghanistan. As a result, Beijing is likely less concerned about whether the US is there dealing with terrorist groups than it was before. An additional concern was that the United States would use bases in Afghanistan as forward staging posts against China. This fear has shifted. While China seems more concerned about secretive CIA deployments, it is less focused on military deployments. Ultimately, a substantial US drawdown will only further assuage this concern.

Overall, China is likely to maintain a watching brief in Afghanistan, refusing to step forward, except where its most direct interests are involved – such as the security of its direct borders with Afghanistan or concerns about Uyghur militants. Undoubtedly China would prefer a stable Afghanistan on its borders. But at the same time, it is not clear how concerned it actually is about having an unstable Afghanistan next door. Beijing has now hardened its direct links and borders with the country, meaning China likely feels it has cauterized its direct security concerns. Senior Afghan officials repeat Chinese talking points about Uyghur threats, while they appear to have a path for discussion with the Taliban. Given the relative absence of much activity by Uyghur militants targeting Chinese interests, China is most likely fairly comfortable with the current relative instability.

Playing the Eurasian chessboard

To some degree, Chinese concerns with Afghanistan are shaped by Beijing’s fears of the potential for instability in the country to affect Pakistan and Central Asia. China has invested a great deal in both Pakistan (through the fabled China-Pakistan Economic Corridor, CPEC which is reportedly a cumulative investment package of between $30 and $50 billion) and Central Asia (where Xi Jinping first announced his keynote Belt and Road Initiative (BRI) and Chinese influence and presence has been growing for the past 20 years). These investments are closely linked to China’s long-term project to stabilize its western region of Xinjiang. Consequently, tensions and difficulties between Afghanistan and its southern neighbour Pakistan are of potential concern to Beijing (there is far less tension between Afghanistan and the Central Asian countries). At the same time, China’s long-standing and close relationship with Pakistan means that China is likely to favour Islamabad over Kabul.

In fact, the relationship with Pakistan plays a substantial part in China’s relationship with Afghanistan. While Islamabad used to be the conduit of China’s relationship with Afghanistan, Beijing is now more confident in its direct relationships with Kabul and has crafted a policy which is developed around its specific interests. At the same time, its relationship with Pakistan is still significant, and much of what China does is done with taking into consideration the impact on Pakistan’s interests.

The consequence of the proximity between Islamabad and Beijing has been a knock-on effect on India and its role in Afghanistan (and the broader region). Already locked into a tense confrontation with India after border violence in Ladakh, China’s security apparatus is increasingly pushing for a more confrontational approach towards India. Taken alongside the growing hard-line set of relationships with Pakistan, this suggests Beijing might be more willing to accede to Pakistani positions on India’s role in Afghanistan. This is unlikely to be a major driver of the Chinese policy on Afghanistan, but it will play into its considerations. The suggestions floated during President Xi and Prime Minister Modi’s one-on-one meetings that they would focus their efforts on finding ways to cooperate in Afghanistan154 are likely to be shelved for the time being due to broader tensions, and Pakistani fears about Indian activity in Afghanistan are likely to get a positive hearing in Beijing.

Taken to its most extreme, this could result in China and India waging a proxy war in Afghanistan. Hints of what this could look like might already be seen in the repeated attacks against Baluchi groups operating from bases in Afghanistan155 that have targeted Chinese interests in Pakistan.156 While those responsible for the attacks are not often identified, or they are blamed on vague militants, there is a correlation between high profile attacks in Pakistan against Chinese targets, and subsequent targeting of senior Baluchi figures hiding in Afghanistan. There are also reports about India stirring Tibetan activists or fighters against China.157 Senior Indian politicians made appearances at public events alongside Tibetan activists and the Indian press championed the role of Tibetan forces serving in the Indian Army158 (there have also been reports of Chinese agents stirring things up with Assamese separatists159). Were this escalation to develop further, it could turn into Chinese and Indian proxies targeting each other in Afghanistan.

At the same time, it is worth noting that there is likely a limit to how far Beijing will let Pakistan dictate its policies towards India, and the degree to which China will seek a full on conflict with India. Notwithstanding border tensions and a growing Indian effort to de-couple technologically from China by banning Chinese mobile phone applications and threatening to ban Huawei and ZTE from building Indian telecoms infrastructure,160 Prime Minister Modi and other senior Indian officials have continued to engage in multilateral institutions where China is an influential leader.161 Senior Indian representatives have attended both the BRICS (Brazil – Russia – India – China – South Africa) and Shanghai Cooperation Organisation (SCO) Summits in 2021, and still talk about engaging productively within them.162 Furthermore, the thawing in relations between Islamabad and New Delhi could further complicate this dynamic. There remains a danger within this overall context that Afghanistan becomes a useful deniable battlefield where the two sides’ more hawkish elements and security agencies can face off against each other.

Counter-terrorism as a priority

Counter-terrorism has always been high on China’s list of concerns with Afghanistan, though the threat from militant Uyghur networks in the country seems much reduced in comparison to earlier years. China has not reported any attacks within its borders linked to militants in either Afghanistan or Pakistan for over a decade – the last time was a 2011 incident that took place in Kashgar.163 China’s border control efforts have focused on supporting the construction of an Afghan security forces base in Badakhshan,164 providing equipment for Afghan forces and undertaking joint patrolling with their Afghan counterparts,165 while also providing support to border control forces in Tajikistan166 and Pakistan.167 It has also fostered the creation of the Quadrilateral Cooperation and Coordination Mechanism (QCCM) that brings together the Defence Chiefs of Staff of Afghanistan, China, Pakistan and Tajikistan.168

This regional mechanism which has admittedly not done much in the past couple of years, is nonetheless important for a number of reasons. First, it provides China with a direct structure through which it can address its security concerns with Afghanistan. It shows that the People’s Liberation Army (PLA) has an interest in engaging on the security issues related to the country. Second, it provides a multilateral framework which answers a need which should (in theory) fit within the responsibility of the SCO. The existence of the QCCM in many ways reflects China’s disappointment with the SCO as a vehicle to advance its security concerns with Afghanistan.169 Third, the QCCM was established without notice to Moscow, something troubling to Russia as one of the members, Tajikistan, is also a member of the Russian-led Collective Security Treaty Organisation (CSTO), whose members are supposed to cooperate closely on security matters. This fact highlights both China’s willingness to act without heeding Russia’s concerns and the fallacy of common assumptions that China only focuses on economic issues in Central Asia while leaving security issues to Moscow.

Besides securing its direct border with Afghanistan, it also developed relationships with parties in Kabul interested in countering Uyghur groups. Both the Taliban and the Government of the Islamic Republic of Afghanistan (GIRoA) have said they would either fight Uyghurs or prevent them from acting against China from the Afghan territory. The lack of any major attack or plot in Xinjiang or China for years reflects the relative effectiveness of this security blanket from China’s perspective, though it is equally clear that China wants to ensure that it can guarantee its security concerns directly as well as through partners.

Having said this, China’s increasing concern about the US potential use of Uyghur proxies to attack or undermine its interests, suggests that counter-terrorism (CT) will remain high on Beijing’s agenda, with indications that China might have already started to take a more proactive view on disrupting Uyghur networks in Afghanistan.170

Binding the world with Belts and Roads

China’s Belt and Road Initiative has, for the most part, not touched on Afghanistan. While there have been numerous conferences, and officials from both the Afghan and Chinese governments talk about the BRI relevance for Afghanistan, the truth is that there has been as little investment in infrastructure or other domains in Afghanistan as China has made in Central Asia or Pakistan. The one piece of direct infrastructure connecting the two countries which has been mooted is a fibre optic cable that is supposed to run through the Wakhan Corridor – a project supposedly developed under the auspices of a World Bank initiative.171 It is worth noting that Chinese firms have worked (and are working) on numerous infrastructure projects within Afghanistan, but these are all funded by international financial institutions rather than by Beijing. In other words, Chinese contractors are working on the ground, but it is not part of any formal Beijing driven BRI project.

The two much vaunted economic investment projects in Afghanistan – the Mes Aynak copper mine and the Amu Darya oil field – have both stagnated and not delivered nearly the local benefits that the Afghans had hoped when they signed the deals.172

China has, however, encouraged BRI related projects in Central Asia and Pakistan that might connect with Afghanistan, particularly those focused on developing infrastructure linked to CPEC. Beijing has long wanted to get connected with Afghanistan and has invested in making border crossings of goods more efficient.173 As direct trade between China and Afghanistan also remains limited174, Afghanistan therefore does not play a particularly significant role in China’s broader economic vision for the region, except with regards the potential spill over of instability from Afghanistan to Central Asia and Pakistan, where China has substantial investments. Going forward, it is unlikely that this is going to change much. The Chinese economic vision for the region does not need to include an Afghanistan that will succeed. Additionally, there has been a broader push by Chinese institutions to recalibrate the projects that they are doing under BRI with a view to ensuring economic sustainability and returns on investment. Seen in this light, it is unlikely that Afghanistan will become a major target for BRI support in the future.

——–

144 E. Wong and M. Mashal, “Taliban and Afghan peace officials have secret talks in China”, The New York Times, 25 May 2015.

145 “常驻联合国副代表耿爽大使在阿富汗问题阿里亚模式会上的发言”, Permanent Mission to the UN, 20 November 2020 (Speech by Ambassador Geng Shuang, Deputy Permanent Representative to the United Nations, at the Aria Model Meeting on Afghanistan).

146 Ministry of Foreign Affairs, “Foreign ministry spokesperson Hua Chunying’s regular press conference on 3 December 2020”, People’s Republic of China, 3 December 2020.

147 “China welcomes US-Taliban peace deal: FM spokesperson”, Xinhuanet, 3 February 2020.

148 “China welcomes intra-Afghan talks, expects lasting peace via joint efforts”, China Global Television Network, 14 September 2020.

149 “The status of the Afghan Taliban”, Charhar, 13 October 2020.

150 Foreign Ministry Spokesperson Hua Chunying’s Regular Press Conference on March 26, 2021 Ministry of Foreign Affairs of the People’s Republic of China, https://www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/t1864659.shtml

151 J. Swan and B. Allen-Ebrahimian, “Scoop: Trump administration declassifies unconfirmed intel on Chinese bounties”, Axios, 20 December 2020.

152 D. Markey, “The best place to test cooperation with China is in Afghanistan”, The Hill, 22 February 2021.

153 “China condemns US for delisting of ETIM as terrorist organization”, China Global Television Network, 6 November 2020.

154 A. Krishnan, “Modi-Xi bonhomie 2.0: all that happened during the ‘informal’ Wuhan summit”, India Today, 28 April 2018; S. Haida and A. Aneja, “Narendra Modi-Xi Jinping ‘informal summit’ in Chennai from October 11”, The Hindu, 9 October 2019.

155 S. Shukla, “Who are Baloch Liberation Army? Insurgents who killed 30 in Pakistan in last one week”, The Print, 20 February 2020.

156 “Alleged leader of Chinese consulate attack in Pakistan killed”, Al Jazeera, 27 December 2018.

157 K. Purohit, “Tibetan SFF soldier killed on India-China border told family: ‘we are finally fighting our enemy’”, South China Morning Post, 24 September 2020.

158 A. Bhaumik, “Nyima Tenzin: an unsung Tibetan hero of India’s resistance against Chinese PLA’s aggression”, Deccan Herald, 2 September 2020.

159 “Beijing said to fund separatist India movement”, Asia Sentinel, 21 August 2020.

160 M. Singh, “India bans 43 more Chinese apps over cybersecurity concerns”, TechCrunch, 24 November 2020.

161 “PM Modi addresses SCO summit: Key points”, The Times of India, 10 November 2020.

162 “Brics summit 2020 live updates: PM Modi addresses Brics summit”, The Times of India, 17 November 2020.

163 M. Wines, “China blames foreign-trained separatists for attacks in Xinjiang”, The New York Times, 1 August 2020.

164 M. Martina, “Afghan troops to train in China, ambassador says”, Reuters, 6 September 2018.

165 S. Snow, “Chinese troops appear to be operating in Afghanistan, and the Pentagon is OK with it”, Military Times, 5 March 2017.

166 “Tajikistan: secret Chinese base becomes slightly less secret”, Eurasianet, 23 September 2020.

167 ANI, “China strengthening military base in Gilgit Baltistan by constructing mega infrastructures, say activists”, Yahoo News, 17 July 2020.

168 “QCCM military group launched to counter terror”, The Nation, 4 August 2016.

169 The existence of the QCCM in many ways reflects China’s disappointment with the SCO as a vehicle to advance its security concerns with Afghanistan. China has consistently sought to get the SCO to engage more in Afghanistan, with Xi Jinping once again raising the issue during the SCO Heads of State Summit (held online) in November 2020. See: X. Jinping, “Full text: Xi Jinping’s speech at 20th SCO summit”, China Global Television Network, 10 November 2020. However, notwithstanding China’s push, the organization has consistently played no role in Afghanistan. Since 2017 there has been a push to revive the SCO-Afghanistan Contact Group but it is not clear that this grouping has achieved anything practical. See “SCO Resumes Afghanistan Contact Group Meeting”, Tolonews, 11 October 2017.

170 While the full details are not clear, public and private reporting has suggested that the network of Chinese agents that was disrupted by NDS in Kabul in late 2020 was seeking to establish a fake Uyhgur cell to draw in real Uyhgur networks to neutralise them. See S. Gupta, “10 Chinese spies caught in Kabul get a quiet pardon, fly home in chartered aircraft’, The Hindustan Times, 4 January 2021.

171 Z. Jahanmal, “Afghanistan, China to connect through fiber optic network”, Tolonews, 23 April 2017.

172 R. Pantucci, “China’s non-intervention in Afghanistan”, The Oxus Society, 18 November 2020.

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

A week and a bit later, finally posting my most recent piece for local paper Straits Times. This one explores the Digital Silk Road, something I have been looking at a growing amount for this larger RUSI project I have been working on which has a specific cyber and digital strand to it. In other words more on this to come, though more likely from the policy angle than the technical one which I am continually learning about.

Bumps on the Digital Silk Road

Chinese tech giants are superb builders but feared for their prowess and government links. But what if the greater risk lies in these firms themselves?

A potentially bigger problem the Digital Silk Road faces comes from within China.PHOTO: BLOOMBERG

At the height of the Sino-Indian Himalayan border clash last year, New Delhi suddenly slapped a ban on dozens of Chinese mobile phone apps on security grounds. Most prominent among them was TikTok, the video-sharing app which has taken the world’s teenagers by storm.

The Indian ban came amid a wider wave of pushback against China’s digital and technology companies, led by the United States but taking effect globally in different ways, creating bumps in the building of China’s Digital Silk Road (DSR).

India has always been a major point of interest for Chinese technology firms. With a market size potentially the same as China’s, it offers an opportunity for exponential growth right next door. For TikTok, before the abrupt cut-off, India was its biggest market outside China with some 200 million people on its platform and proof that a Chinese company could take on America’s Big Tech in new markets.

Hardware companies such as Xiaomi and Huawei have long listed India as a major source of growth. In 2018, Huawei announced an “India first” policy and started to establish a growing volume of its manufacturing for the market in the country itself. In 2017, Xiaomi’s sales in India topped US$1 billion (S$1.3 billion), while in the first quarter of this year (notwithstanding political tensions and Covid-19 economic slowdowns) it shipped some 38 million units to Indian customers, accounting for 26 per cent of the smartphone market with an impressive 23 per cent year-on-year growth.

On the software side, Bytedance (TikTok’s parent company) had bet heavily on India prior to the banning, hoping to grow its user base with a local team of around 2,000 staff. Mr Jack Ma’s Alibaba is reported to have invested some US$2 billion in the Indian market since 2015.

This push into India was the realisation of the vision of the DSR, a concept first laid out by Beijing in a 2015 White Paper. At the time, the DSR was somewhat ignored except in specialist circles as it seemed to be the latest variant of the Silk Road nomenclature in the wake of President Xi Jinping’s 2013 Belt and Road speeches in Astana and Jakarta.

Yet this rather dismissive view belies the potential impact of the expansion of the DSR, which sees China, through its technology firms and state loans, helping recipient countries build their telco networks, e-commerce, mobile payment, smart city and other high-tech infrastructure. Chinese technology companies are paving parts of the world’s digital future.

In the global market, China’s technology firms are more than holding their own. Huawei and Xiaomi phones are affordable and of good quality. Huawei is increasingly the only firm that is manufacturing the infrastructure needed by countries to upgrade their next-generation Internet network. Huawei and ZTE are among the dominant providers of telecoms hardware in the countries surrounding China, while firms like Hikvision or Dahua are offering new technologies at accessible rates.

Chinese online payment applications and fintech are at the cutting edge, while across growing swathes of Asia, Alibaba, Taobao and JD.com online sales platforms are competing robustly against Amazon and other online marketplaces. The easy access to cheap Chinese products makes them very attractive.

An entire sub-economy has emerged of local entrepreneurs in countries such as Kyrgyzstan and Indonesia who create websites in local languages that provide people with access to the Chinese platforms. Across Asia (and more widely), these online middlemen set themselves up as interpreters of Chinese platforms to those who are unfamiliar with the language but want access to the bountiful and cheap products on offer.

In some ways, this is a classic win-win. The countries get affordable technology, investment and access to the Chinese market.

DATA SECURITY CONCERNS

Yet there is another side to it which India was trying to address with its abrupt closure of a whole raft of Chinese apps. Part punitive and part defensive, India’s pushback was amongst the sharpest that China had yet encountered as it paved its Digital Silk Road.

Concerns about privacy, access to data and espionage have increasingly dogged Chinese technology firms. Former president Donald Trump’s White House was aggressive in calling out the dangers of Chinese technology, though his scattershot approach did not always deliver the impact that was intended. Chinese firms and the government have repeatedly denied the accusations levelled against them.

Notwithstanding the Chinese denials, there are areas of concern. In 2017, Huawei removed a Wi-Fi module in a surveillance system sold to police in Lahore when it was discovered by locals. The discovery of the module, which provided an option for remote control that the company had not advertised, caused consternation in Islamabad. Not enough, however, to stop the Huawei chief executive from meeting Prime Minister Imran Khan in 2019 and signing a memorandum of understanding for the company to build a giant cloud data centre in Pakistan. And there have been repeated reports that Chinese-installed technology in the African Union’s headquarters in Addis Ababa have been used to send information back to China.

Separately, TikTok has come under fire in various jurisdictions for censoring data, in part to adhere to Chinese government concerns. In Europe, the Italian government is suing the company for not having adequate protection for children’s data.

The biggest fear at the moment, however, is data collection and access. Driving this is the fear that the Chinese government could in theory demand that any Chinese company hand over whatever data it might have on foreign nationals using its application.

The reality, however, is far more complicated than this. In response to different data protection requirements of the countries they operate in, Chinese tech companies have built data centres around the world to store client information. Singapore, for example, is a particular beneficiary of this trend in Asia, offering a secure location outside China in the heart of Asia. Such centres should be beyond the Chinese government’s reach, though, of course, it can be difficult to monitor this.

But this is not the most interesting aspect of this data collection. Far more important is the volume of information this provides Chinese firms to hone their technical capabilities.

The current rush in new technology is to develop new artificial intelligence tools. In order to train these tools, you need massive amounts of data for them to learn from – something these Chinese behemoths are increasingly gathering in vast volume from around the world and particularly in Asia.

For countries leery of China’s ambitions, this advantage makes the growth of Chinese tech companies not only a potential national security threat, but also an economic threat that could stymie if not kill off rival plans to develop similar tools.

Given all of these concerns, it is not surprising that India decided to block Chinese penetration of its market. For India and others, the worry is not just the DSR burrowing too deeply into their local economies but also the longer-term risk of taking over their digital futures and exposing them to unknown future problems.

VULNERABLE GIANTS

For all that, a less discussed but potentially bigger problem the Digital Silk Road faces comes from within China. The abrupt defenestration of China’s most famous tech entrepreneur, Mr Ma, after he had carried Beijing’s flag for tech growth and innovation around the world, highlighted how vulnerable Chinese private companies really are. Not even China’s biggest tech company, Alibaba, is immune to political censure and punishment.

So far, it appears a chastened Mr Ma is having his wings clipped for challenging China’s domestic lenders too brazenly. His future remains unclear, but the slapdown halted what would have been the world’s largest-ever initial public offering of Alibaba’s payments off-shoot, Ant Financial.

While the scenarios are speculative at this stage, some questions about the relationship between the central government and Chinese tech companies need looking at. What are the implications for contracts or activities run by these companies should they fall foul of the government? What if the Chinese government was to abruptly nationalise or take over parts of Alibaba’s global empire? Countries could find themselves suddenly facing a situation where their entire online payments system was in fact owned by a foreign government.

In other words, the Digital Silk Road’s greatest dangers may not necessarily lie in the possibility of Chinese firms secretly accessing private data or the Chinese state using the infrastructure to hack people around the world, but the political vulnerabilities these firms face back home. If they are less stable than they appear and given the world’s growing reliance on digital economies and infrastructure, the unravelling of key parts of this silk road is a far graver threat than meets the eye.

Raffaello Pantucci is a senior fellow at the S. Rajaratnam School of International Studies and has a forthcoming book looking at China’s relations with Central Asia.

The first in a pair of articles for Asian papers looking at China’s relations with Central Asia through the current COVID-19 disaster. This first one for the South China Morning Post, exploring the reality of how trade is being impacted during this time. In many ways what has been happening is not that surprising, but at the same time it seemed quite dissonant from Wang Yi’s comments during the 两会.

Belt and Road Initiative: China’s rosy picture is at odds with realities on the ground during Covid-19

  • Foreign Minister Wang Yi and others have sung the praises of the initiative and promoted its goal of improving cross-border flows of people and goods
  • The reality during the pandemic has been different, though, with China’s neighbours and partners frustrated by border closures, and goods facing lengthy delays
Foreign Minister Wang Yi (second right) attends a virtual ceremony with Pakistani Foreign Minister Shah Mahmood Qureshi to formally commence the celebrations of the 70th anniversary of diplomatic relations between the two countries in Beijing on March 2. Photo: Xinhua

Foreign Minister Wang Yi (second right) attends a virtual ceremony with Pakistani Foreign Minister Shah Mahmood Qureshi to formally commence the celebrations of the 70th anniversary of diplomatic relations between the two countries in Beijing on March 2. Photo: Xinhua

There is no pause button for the Belt and Road Initiative, Foreign Minister Wang Yi said during his expansive news conference on Chinese diplomacy during the annual Two Sessions summit in Beijing. Yet, look around China’s neighbours in Central and South Asia and the story looks very different. Closed or only partially opened borders, alongside stories of Chinese frustration at local partners, suggest at the very least a slow-motion button has been hit in several areas.

While the initiative as articulated by Wang is focused on infrastructure development, China has repeatedly highlighted how infrastructure is only the first pillar of the broader vision. Longer-term, the strategy is intended to be a vision for trade and economic flows around the world.

During a “high-level video conference on belt and road cooperation”, held last June, Wang spoke of a desire to “discuss the establishment of fast-track lanes for cross-border flows of people and goods with belt and road partners”.

Talk to haulers or traders in Central Asia, though, and the picture during the past year has been very different. Last December, the bottlenecks at Kazakh-Chinese rail borders became so bad that a reported 7,000 containers were stuck waiting to cross, with delays stretching to more than a month because of restrictions on the Chinese side.In Tajikistan and Kyrgyzstan, the border posts have remained closed at China’s request, with only very limited traffic being reported as passing through.

In his meeting last week with Chinese Ambassador to Bishkek Du Dewen, Kyrgyzstan Prime Minister Ulukbek Maripov made the latest official plea for China to open its border. Du has held numerous meetings with various Kyrgyz officials since the new government came in, and the question of reopening and speeding up border crossings has been repeatedly brought up, to no avail.

Traders using the Kulma Pass between China and Tajikistan have faced a closed border since October, and reportedly the Chinese side is using the opportunity to increase their own market share and squeeze out Tajik traders. One spoken to by the local press reported how winter clothes he had ordered from Kashgar last year were still stuck on the Chinese side and were now useless to him as winter had largely passed.

A Tajik official said in February that only 25 Tajik trucks had been allowed through the pass since the beginning of the year, and there was a 260-truck backlog. Meanwhile, the queue at Erkeshtam on the China-Kyrgyzstan border is four days, and only seven to eight trucks are able to cross daily as opposed to 50 to 60 that used to do so.

This has had a knock-on effect on transport costs. Uzbek markets report that the costs of taking a truckload of tangerines from China in 2019 was US$4,000 to US$5,000 per truck. In 2020, because of the coronavirus pandemic, the cost per truck increased to US$25,000 to US$26,000.Trucking goods from China to Europe used to take 16 to 18 days, but the border restrictions by China mean a vehicle can find itself waiting 15 to 20 days just to cross the China-Kazakh border.

The blame for many of these blockages is on the Chinese side, where restrictions blamed on Covid-19 are stopping transit trade. In fact, according to Chinese trade data, flows between China and all Central Asian countries with the exception of Kazakhstan have slumped in the past year. They range from an almost 50 per cent drop year on year with Tajikistan and Kyrgyzstan to a 30 per cent fall with Uzbekistan and Turkmenistan.

Kazakhstan has seen a 5 per cent year-on-year increase, though this is down on 9 per cent the year before and 34 per cent the year before that. So much for trade and connectivity flows being boosted during Covid-19. 

At the same time, China’s perennially complicated relationship with Pakistan continues to stumble on. The China-Pakistan Economic Corridor (CPEC) is inching forwards, although Chinese irritation is increasingly visible.

The 10th meeting of the Joint Cooperation Committee for CPEC, the central organising body which includes senior figures from China’s National Development and Reform Commission and Pakistan’s Ministry of Planning Development and Special Initiatives, has yet to take place. The ninth session was held in November 2019.Repeated delays blamed on Covid-19 and other complications have held things up, leading to suspicions something else might be at play. Covid-19 was, for example, not enough to stop Defence Minister Wei Fenghe visiting Pakistan in December 2020 to sign a new Memorandum of Understanding to bolster the already strong China-Pakistan military relationship.

The problems around CPEC have been obvious for some time. The increasing Pakistani military presence and involvement with CPEC decision-making highlights Beijing’s frustration, given that it has always favoured decisive military men over Pakistan’s politicians, and Chinese and Pakistani officials see military relations as the backbone of bilateral relations.This comes alongside the appointment of Nong Rong, a trade specialist from Guangxi, as ambassador to Pakistan in contrast to the usual foreign ministry cadre and South Asia hand who would usually be appointed, showing a desire by the Communist Party to further strengthen its hand.

None of these problems are that new or surprising, and China is perfectly entitled to strengthen its border controls to control the spread of Covid-19. However, it seems somewhat dissonant with the rosy picture painted by Wang.

Officials all over the world are prone to positive interpretations of events, but to offer something so discordant with what is happening on the ground suggests a larger problem. China has placed downward pressure on the Belt and Road Initiative, notwithstanding a clear desire by neighbours for things to get going again.

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

A longer piece for an outlet I have written for a few times before, the world’s oldest journal dedicated solely to international affairs, Current History. Am again here looking at China through the lens of the Belt and Road Initiative (previous pieces have looked at Central Asia and South Asia), this time looking at how it impacts and influences beyond infrastructure. It is currently free to access on their site, so please download directly, but have also provided some links at the bottom of this post.

“The BRI is creating a web of links around the world that will guarantee some form of pervasive Chinese influence for generations to come.”

The Many Faces of China’s Belt and Road Initiative

Global Trends: January 2021

China’s Belt and Road Initiative is best known as a massive set of infrastructure projects stretching from Asia to Europe. But more than that, it is a sweeping foreign policy vision that provides China with opportunities for deep engagement with virtually every aspect of state and society in its partner countries. Many developing countries welcome the investments and opportunities for trade linked to the initiative, but some of the projects have sparked local resistance over fears of unfair terms or potential opportunities for Chinese intelligence penetration.

The emergence of COVID-19 initially loomed as a catastrophe for the leadership of the People’s Republic of China (PRC). Although Beijing later tried to change the narrative of the pandemic’s origins, the first major outbreak of the novel coronavirus occurred in Wuhan, the capital of Hubei province and the largest city in central China. Early in 2020, the PRC leadership faced a domestic crisis as people in the afflicted region panicked and accusations flew over mismanagement of the outbreak. President Xi Jinping, seemingly worried that his reputation might be affected by association with the disaster, dispatched Prime Minister Li Keqiang to serve as the face of the official response. The time-worn strategy of blaming local leaders was deployed; a range of Wuhan officials was condemned and punished in quick succession. All the while, Beijing stayed above the fray, seeking to absolve itself of responsibility.

As time passed, and as health authorities in Wuhan (and around China) brought the outbreak under control, Beijing switched its approach. The leadership had come to see COVID-19, which by then had become a global pandemic, as an opportunity for China to show a positive face to the world. Having quietly accepted aid from other countries in the early days of the outbreak (privately requesting that European powers refrain from publicizing the assistance they provided), China decided to champion the aid it had begun to distribute around the world.

China’s “medical diplomacy” (sometimes called “mask diplomacy”) focused on sharing expertise and sending doctors and medical equipment to countries that were struggling to control the virus. This was all wrapped together and labeled a “Health Silk Road.” Beijing was relying on the diplomatic playbook that had come to typify the Xi era. Almost everything China does outside its borders increasingly is incorporated into a Silk Road narrative.

By doing so, Beijing is associating a variety of policies with its overarching vision for the Belt and Road Initiative (BRI). The BRI is a foreign policy framework that Xi first articulated in 2013, when he spoke of creating a Silk Road Economic Belt across Central Asia. Soon after that, he called for creating a twenty-first century Maritime Silk Road. The two schemes together make up the foundation of the BRI.

For more, go either to Current History or get in touch or download it here.

Posting my latest piece for the South China Morning Post which seeks to push back on some of the latest narratives to emerge about the end or collapse of the Belt and Road Initiative. Am skeptical we have seen the end of it for various reasons. Am not very convinced by the title or image chosen by the editors to be honest, but cannot complain as the piece got some attention online and always enjoy publishing with the SCMP. A longer piece on BRI is coming out next month for those keen, and next year is going to be full of China-Central Asia material in the build up to the book coming out. As ever, welcome thoughts back.

As the face of China’s foreign policy, the belt and road will survive debt and coronavirus

An exhibitor sells goods at the “Belt and Road” exhibition area of the 17th China-Asean Expo in Nanning, Guangxi, on November 27. The belt and road is an idea rather than a project, and lends its name to multiple projects and events, even theme songs, cartoons, courses and think tanks. Photo: Xinhua

Having had such a catastrophic year, the world seems eager to turn the page and jettison what went before. Among the many victims of this purge appears to be the Belt and Road Initiative, which after some seven years of existence is reportedly winding down.

This premature dismissal is based on an interpretation of a vision as a project, and misses how embedded the belt and road is in Chinese foreign-policy thinking.

The belt and road draws on a long tradition of Silk Road conceptions linked to China. Clichés abound when one thinks back to Marco Polo, Matteo Ricci, the epic Battle of Talas in 751 or Ferdinand von Richthofen, who in 1877 coined the Silk Road phrasing after his travels through Asia.In contemporary Chinese parlance, the idea first came into focus under premier Li Peng, who in 1994 embarked on a tour of Central Asia in the wake of Deng Xiaoping’s historic “Southern Tour” that started China on its communist-capitalist path.

Li’s trip was intended to take place in 1993, though he was reportedly delayed by ill health. Also, the visit did not stop in every Central Asian capital: Tajikistan, in the midst of its brutal civil war, was given a miss. Security was a key aspect of Li’s trip, and requests for support in suppressing militant Uygur networks were made at most stops.But the visit was also framed around trade and connectivity, and reopening the Silk Road across the Eurasian continent to China.

Following the trip, Li hosted a conference in Beijing where he called for rail connectivity across the region. Around that time, Chinese officials also held discussions with Japanese officials and investors about building pipelines from Turkmenistan, across China, to the eastern seaboard from where the hydrocarbons could help fuel Japan’s booming economic growth.

The Silk Road routes at the time went across China, rather than from it. Looking in the other direction, premier Li also travelled to Europe seeking business links.

So when President Xi Jinping announced his own interpretation of the Silk Road in 2013, under the framing of the Belt and Road Initiative, he was treading on familiar territory – both practically, but also conceptually. It was about building links around the world, and reaching European markets.

But ultimately, the belt and road as articulated by Xi is to provide a vision for Chinese foreign policy. There are undoubtedly many individual projects under the broader umbrella, but they are specific items rather than a connected infrastructure plan.

When Xi announced the idea, it was not meant to be the inauguration of a single large infrastructure project, but rather to provide the great machine of China’s external-facing apparatus with a new driving vision. The idea was that, from now on, China would articulate its foreign policy identity on the world stage as one built around building things, connecting with people and countries, and together fostering prosperity.

That’s a fairly anodyne and positive foreign policy vision, and one that resonates with anyone who has listened to Chinese officials’ endless win-win rhetoric.

It built on the earlier steps that Xi and his predecessors had laid, not only in terms of using Silk Road terminology, but also in focusing first on China’s immediate periphery and helping focus domestic efforts of spreading prosperity to China’s historically poorer inner territories.

Jiang Zemin had his Great Western Development strategy, and Xi built on Peking University professor Wang Jisi’s call to “March West”. All of these are tied together and projected forward with the grandeur now appropriate for a China that was on its way to being the world’s second-largest economy. Thus was born the Belt and Road Initiative.

But the key is that this was an idea rather than a project. Many infrastructure projects and corridors were immediately attributed to it, but so were innumerable non-infrastructure-related projects. Theme songs, cartoons, cultural shows, think tanks, courses and more were thrown into the mix (alongside many non-infrastructure-related economic projects).There was a moment when you could not avoid the framing in every conversation you had in China. It was also enshrined in the Chinese Communist Party’s charter. Belt and road became a way of thought.

This is not only about Xi imprinting his ideas onto the nation’s history, but also creating a vision that is the central organising concept which will dominate Chinese foreign-policy thinking in the near and possibly far future.This is also why it is not something that can fail, end or be drawn to a close. Quite aside from it being linked to a supreme leader who will not brook failure, the vision has largely artificial and unclear deadlines. While China has put a date of 2049 on achieving the belt and road, what needs to be done by then is not specified.

And even if it was, it would be in typically vague terms, meaning that whatever result has been achieved could simply be drafted into whatever the new interpretation of the Belt and Road Initiative was. Goalposts on ideas can move if they are set loosely enough.

The belt and road as a foreign policy idea is unlikely to end as long as the current leader is in power. And if it looks like it is slowing down, the vision could be reinterpreted to suit. It was never about pure aid, and it was never a single project.

It is simply Xi’s vision for how China should talk about going out into the world. Phrased like this, it has no reason to ever be completed or resolved. Unlikely to die, it will simply continue to evolve.

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

As ever, have let a lot of time pass since my last posting, but have not been delinquent in my writing. Am struggling with some longer pieces, this time of enforced immobility has been of mixed usefulness in being productive in this regard. In any case, first up another short piece for the South China Morning Post, this time looking at the China-India clash which has not resolved itself but seems to be settling in to a higher level of tensions as the norm.

Crumbling China-India relations suggests escalation will continue

China has never taken India seriously, while New Delhi has never made a clear choice about what it wants from relations with Beijing. The possibility of miscalculation is growing

China and India continue to talk past each other. China still does not regard India as a serious power, while New Delhi is prodding Beijing in areas of great sensitivity.

Security planners on both sides appear willing to accept higher tensions in their bilateral relationship, but the clash in the Galwan Valley shows this can get out of hand. The space between escalation and miscalculation is closing, and a dangerous new normal is establishing itself across the Himalayas.

China has never taken India seriously. This irritates New Delhi, which can feel Beijing’s condescension. China has also increased activity around India without considering what that looks like to its neighbour. With growing Chinese economic and security activities in almost every country around India, it is no wonder New Delhi sees what looks like encirclement.

India, on the other hand, has continually hedged and never defined what it wants from its relationship with China. In some contexts, its choices speak to a desire for close engagement – from entering the BRICS bloc, the Russian-India-China grouping or the Shanghai Cooperation Organisation, to Prime Minister Narendra Modi’s love-in meetings with President Xi Jinping.

At an economic level, Delhi has welcomed some Chinese investment. It tried to engage with parts of China’s Belt and Road Initiative it liked, such as the Asian Infrastructure Investment Bank or the Bangladesh-China-India-Myanmar Economic Corridor.

At the same time, India has bristled at China’s close relationship with Pakistan, sought a closer strategic relationship with the United States and other Chinese adversaries and tried to limit some Chinese investment in the country. The global backlash against TikTok first emerged in India, which accounts for a huge part of the application’s users.

The two Asian giants bump into each other across the Himalayas, where they share an unclear border. Both claim they want to resolve this, yet little movement has been achieved. This border has become the focus of the current clash in which soldiers on both sides have died and no clear resolution appears likely any time soon.

Rather, the discussion now appears to be an acceptance of higher tensions across this disputed border, with both finding ways of strengthening their position and jostling against the other. The tensions have moved into every other part of their bilateral relationship.

The result has been a confused emboldening by Delhi. Planners talk about how things cannot go back to normal with Beijing, but it is not always clear where they want them to go. Economic resistance to China is tempered by reality, while there is a clear limit Delhi sets to the other alliances it wants to forge against China. It wants confrontation with Beijing, but maybe not as aggressively as Washington is pushing.

Worryingly, Delhi has injected Tibet into the narrative. The press is full of stories of Tibetan soldiers in the Indian armed forces. The death of one Special Frontier Force officer, Tenzin Nyima, in an explosion near Pangong Tso turned into a major news story following leaks in the Indian press about the unit. A political leader in Modi’s Bharatiya Janata Party, Ram Madhav, attended and tweeted about the funeral.

All of this led to more posturing by Beijing. Official media reports ever grander military statements and exercises in the region near the border with India. Ministry of Foreign Affairs spokespeople continue to reject any Indian claims while calling their own bellicose posturing merely routine behaviour.

From Beijing’s perspective, the confrontation with India is being manipulated by Washington. Rather than treat Delhi as a direct competitor with agency, it sees India being pushed towards such action by the United States.

The result is a repeat of a continued Chinese position on India – one of faint derision. Beijing does not take India seriously but rather sees it as acting at others’ behest.

This means Beijing does not seriously engage with Indian concerns while overlooking the provenance of potential threats. Now that Beijing has created a new context of tension on its border with India, it will not back down – especially as it does not think India is doing this on its own behalf.

It seems unlikely tensions will escalate into nuclear conflict. However, India playing the Tibet card prods Beijing in a very sensitive place. Meanwhile, China’s refusal to take India seriously exacerbates Delhi’s sense of needing to do more to get China’s attention.

The space for miscalculation is growing, and both are increasingly doing things to the other in a way in which they are more likely to misjudge reactions. This fisticuffs over the Himalayas has the potential to escalate further.

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

More on China in Central Asia, this time looking for the Lowy’s Interpreter, a site I have not contributed to for some time, looking at how the region is quite excited about trying to get the Belt and Road Initiative going once again to help save their economies. Been working on a few much bigger projects on the topic of China’s relations with Central Asia which will be landing over the next year or so, and need to revive the China in Central Asia site which has unfortunately been hijacked. If anybody knows how to help me get it back, please get in touch! Otherwise, will have to recreate it somewhere else.

This aside, been speaking to media about China, including to the National Public Radio and Nikkei Asian Review about the UK-China relationship, while excellent RSIS colleague James Dorsey was kind enough to mention my recent NBR paper in his regular column.

Central Asian nations want to kick-start the BRI – and China is happy

Raffaello Pantucci

Covid-19 has spurred rumours and local tensions, but economic fortunes of the region are increasingly bound to Beijing.

The fire service sprays disinfectant in Nur-Sultan, Kazakhstan last month during the Covid-19 lockdown (Turar Kazangapov/Asian Development Bank/Flickr)

The fire service sprays disinfectant in Nur-Sultan, Kazakhstan last month during the Covid-19 lockdown (Turar Kazangapov/Asian Development Bank/Flickr)

For China, the Covid-19 question is answered by more Belt and Road. As Foreign Minister Wang Yi put it at a press conference during the 13th National People’s Congress in Beijing last weekend:

The impact of Covid-19 on the Belt and Road cooperation is temporary and limited. The Covid-19 will only strengthen and re-energize Belt and Road cooperation and open up new possibilities.

Given the bad press China has been generating, it might be hard to see how Beijing can pull this off. But in places such as Central Asia, such promises resonate.

Central Asian countries have been making all the right noises about wanting to get Belt and Road Initiative–type projects and ideas moving once again. In some ways, they are already proving to be one of the first stepping stones of the Health Silk Road – the articulation of Covid-19 response under the BRI’s expansive umbrella. Having sent aid to China as the virus first emerged in Wuhan, the Central Asians are all now beneficiaries of Chinese aid, which has come in the form of repeated shipments of PPE, doctors, video conferences, aid to military and more. Conveniently, the Health Silk Road was first publicly mentioned by Xi Jinping during a 2016 speech in Uzbekistan.

Of course, China is not universally popular. While medical diplomacy has dominated, there have been considerable tensions, too. Ethnically Chinese people have been harassed in markets in Kyrgyzstan, Kazakhstan and Tajikistan, with a Kyrgyz MP making a call in parliament for their isolation and for them to wear masks in public. In mid-February, relations in Kyrgyzstan boiled over to the point that a planned $280 million Chinese-built logistics centre project had to be suspended. In Kazakhstan, the Ministry of Foreign Affairs hauled in the local ambassador after an article appeared in the Chinese media saying that Kazakhstan wanted to return to China.

And last month, Chinese MFA spokesman Hua Chunying piled into a Russian-initiated conspiracy theory about how American funded bio-labs built to help former Soviet states manage their dangerous weapons after the collapse of the USSR were in fact the potential source of Covid-19. Kazakhstan hosts a number that were specifically name-checked in both Moscow and Beijing. The net result was articles in the Kazakh press saying that as far they were concerned, both the US and China should leave their country. Independent polling appeared to support this.

An art installation in Nur-Sultan, Kazakhstan during the Covid-19 lockdown (Turar Kazangapov/ Asian Development Bank/Flickr)

But what the Central Asians really want is for the Chinese economic monster to get moving once again. Wedged between China and Russia, the Central Asians have suffered the triple whack of a slump in commodities prices, a drop in remittances from migrant labourers usually in Russia (which is also suffering a major Covid-19 outbreak as well as slump in oil prices) and the economic slowdown in China. These are countries whose economic future is inevitably tied to China in some way. The tyranny of geography guarantees this no matter how hesitant they might sometimes feel.

The result has been a fertile terrain for seeking more BRI. At the front of the queue are the Kyrgyz whose leader President Jeenbekov has already reached out to Xi Jinping to seek to renegotiate their debt burden with China (amongst other international debtors) – debts that have been accumulated under the rubric of the BRI. He also sought to reopen Kyrgyzstan’s land borders with China as soon as possible to get trade moving once again. Irkeshtam and Torugart were closed in late January, and it is not yet clear they have been reopened.

Uzbekistan has also been eager to make things happen. During a conference call meeting on 19 May that the Uzbeks convened with Kyrgyz and Chinese counterparts, they sought to hurry the construction of a rail link connecting them all. From the Uzbek perspective, while understandable restrictions were placed on road transport during the Covid-19 crisis, this meant that “railway remains the safest and most reliable mode of transport.” It was also announced in May that China Development Bank was approving a loan of $309 million to allow Uzbekistan Airlines to purchase three Boeing 787-8 Dreamliners.

But the Central Asians are most keen on getting more income now. And while commodities prices may have slumped alongside demand, China has continued to increase its purchases of oil from Kazakhstan. Chinese purchasers also made a collective request to the Uzbek, Kazakh and Turkmen energy companies to collectively reduce their gas sales to China. While such a joint request is necessary to reflect the nature of regional infrastructure, it also highlighted how China’s infrastructure projects have bound the region together both in Beijing’s considerations and local economic fortunes.

This means more BRI is the answer to the downturn. An echo which resonates through the halls of the National People’s Congress in Beijing.

Up next another China piece, this time for the South China Morning Post looking at the Belt and Road in the wake of Xi Jinping’s visit to Myanmar.

Is China getting real with its grandiose visions for the belt and road?

  • Beijing is toning down its rhetoric for the grand plan and rethinking its massive international infrastructure programme, Raffaello Pantucci writes
  • Signs of a more modest approach from Xi Jinping’s trip to Myanmar when there was little official mention of an economic corridor involving the two countries
Topic |   Belt and Road Initiative

Absent from almost all of the official coverage around Chinese President Xi Jinping’s recent visit to Myanmar was any mention of the Bangladesh-China-India-Myanmar Economic Corridor (BCIM-EC).

A belt and road route before the Belt and Road Initiative existed, the corridor was a concept first mooted in the late 1990s but has largely gone nowhere. The bigger question this poses is whether this is a harbinger of China shedding its grander overambitious belt and road visions over the next decade for a more focused and logical set of bilateral engagements.

Certainly there has been a toning down of rhetoric around the belt and road, an infrastructure vision to link economies into a China-centred trading network. While it remains a hot topic in Beijing and a sure-fire way for leaders of other countries to be seen to be aligning themselves with China, its scattered record of success has meant there has been rethinking about how this grand concept will continue to fit into Beijing’s foreign policy repertoire. It continues to be a convenient tag for Chinese diplomats to use given its broad and positive conceptual basis but, it is not clear that China wants to continue to talk in the expansive corridor terms that it used to.

The result has been that while the initiative continues to feature in the public discourse, there has been a refocusing of attention around it. Rather than talk in terms that are almost impossible to deliver to or fail to deliver with the rapidity that might be hoped, the focus of the next stage of the narrative around belt and road will be to focus on the bilateral. Rather than China painting itself as the global regional connector, Beijing will scale back its ambition to focus on delivering direct connectivity to China in the first instance, with everything else coming in the future.

The logic of this from Beijing’s perspective makes sense: why go to the expense and effort of pushing your resources in directions whose direct benefit to China is limited or on a very long time horizon? Better instead to focus on things that are tangible and immediate and provide China with clear connectivity that it can show results at home for.

It will also help address some of the belt and road pushback that Beijing has faced globally, where the initiative is referred to as “debt trap” diplomacy, and an attempt by China to reshape global economic geography around its interests while creating a list of client states.

Not only has the volume of recipient countries complaining been growing, but foreign companies are calling out the win-win rhetoric as they grow frustrated at their inability to benefit from this push of external Chinese capital. Most recently, the European Union Chamber of Commerce in China published a report in which its members complained about a lack of transparency in belt and road projects and irritation that the benefits they had seen from the initiative were “quite insignificant”.

On a visit to Pakistan last year, I met a wave of Pakistani businessmen frustrated at their inability to tap the China-Pakistan Economic Corridor money they heard reported flooding into their country. Beijing is not unaware of these concerns. The Belt and Road Summit in Beijing last year was largely a story of China trying to address global concerns around the initiative, focusing on making it more inclusive, ensuring more local benefit and making a greater effort on environmental concerns.

From this perspective, the dropping of BCIM-EC from Xi’s visit to Myanmar might be a first sign of how Beijing wants to drive the initiative forward. The BCIM-EC was always an awkward corridor to fit into the belt and road given Indian hesitation around it more generally. We saw little public reference to it during the meeting between Xi and Indian Prime Minister Narendra Modi last year, and then again during Xi’s visit to Myanmar.

Instead, we see China focusing on the bilateral, delivering what has already been discussed, and avoiding too much grandiloquence which will ultimately be hard to live up to. Beijing’s track record in Myanmar is a patchy one, and recent reporting has shown how China’s efforts to support peace processes in the country have also failed to deliver.

Ultimately, Beijing will be an important partner for Myanmar. Geographic proximity assures this. The questions are how high a bar does China want to set for this relationship and how much does Beijing want to become the responsible stakeholder it was setting itself up to be?

This might be the key lesson to draw from this visit for the broader belt and road. From a half decade of ever growing grandeur, the next half decade of the initiative will be a more realistic tone and narrative focusing on ensuring China gets what it needs from these bilateral relationships rather than the overblown – and expensive – rhetoric that dominated the first half decade.

And in many ways this is a reflection of the reality of the first intended aim of the initiative, which evolved from Xi’s call for a focus on periphery diplomacy, then developed into a call for greater infrastructure and economic connectivity, and then grew into the globe spanning beast that stretched from Asia to Latin America via Africa and Europe and back. In many ways it could be that this is going to be a period of the belt and road returning to its roots. A moving of the goalposts that will allow for a shift in belt and road rhetoric without having to completely walk away from it and the loss of face that would follow.

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