On the face of it, Chinese President Xi Jinping’s Belt and Road Initiative (BRI) unleashes China’s development potential beyond its borders in what the country promotes as a “win-win” world transport, trade and communications development megaproject never seen before. And research indicates many countries, including Myanmar, are open to what Beijing has on offer.
But what is behind this 21st Century New Silk Road and should Myanmar and other recipient countries be worried?
ENTER THE DRAGON
To understand the scale and potential impact of the BRI, it helps to listen to the words of the scheme’s architect and promoter and to watch his actions.
In an era when world and national leadership can be found wanting, Chinese President Xi, 66, the leader and helmsman of the Communist Party of China (CPC), comes off as accomplished and measured, as seen in his speeches, proclamations and writings since he first unveiled the New Silk Road vision four years ago, and notably during his polished World Economic Forum speech in Davos in 2017.
But on a recent three-day state visit to cash-strapped Greece, Xi’s promises and wording hinted at what is slumbering underneath China’s innocuous-sounding development initiative.
Greece’s port Piraeus is “the dragon’s head” in the Mediterranean, said Xi. The European Investment Bank (EIB) and the Export-Import Bank of China agreed to finance Cosco’s investment plan for the port of Piraeus to the tune of EUR 140 million ($156.8m).
The language used is telling. Xi sees Greece, Italy and a number of other European countries as China’s “gateway” into Europe and further afield, what in his own colourful terms will be the Chinese dragon stretching from the east coast of China across Asia and Europe to the Atlantic. This is just part of a massive communications and trade network that seeks to link China with countries in Asia, Europe, Africa and further afield.
KEEPING THE LID ON
Underlying the bold plan, however, is an element of desperation. It is hard to fault China’s rags to riches domestic development story over the last three decades, running out massive modern transport infrastructure, including some of the fastest trains in the world, and erecting tall, gleaming cities with all the latest gadgetry.
But the Chinese economy is stuttering and “development opportunities” outside its borders allow it to maintain momentum – and keep its citizens content. The China cauldron is already bubbling with numerous protests over local grievances, from corruption to pollution, though at present there is no serious threat to the communist party’s tight grip over the Middle Kingdom.
The smiles and photo opportunities in Greece paper over questions that have been voiced about the BRI project. As parts of this plan materialize, it is hard to ignore the debt burdens, pressures and, in some anecdotal cases, arrogance on display in China’s plan to secure its economy and markets and attempt to wrap the world in its embrace.
Let’s be clear – the Chinese project involves far more than the “traditional” development outreach as typically pursued by countries with limited strings attached. It may sound overdramatic but Xi’s speeches and writings hint at the Chinese dragon unleashed, a response in part due to the deeply embedded sense of injustice felt by China over the centuries of subjugation by Western imperialism.
And China’s outreach is not just concrete and steel. A monitoring of progress since Xi came to power shows just how widespread this programme of Chinese development and influence is around the world, one that goes way beyond the physical to even attempt to control thought and how history is told at home and beyond China’s shores.
All this comes as the “Asian Century” gradually asserts itself, one in which the planet’s political centre of gravity will shift to focus on China, Russia, India and Southeast Asia, including Myanmar, tied to markets in Europe and resources in Africa and to a lesser extent South America – a shift that could see current “world leader” Washington struggling to maintain influence.
Under this scenario, the question is whether the future will be one of China hegemony or one of multi-polarity?
All this matters when assessing what the BRI will mean for the world and for Myanmar.
The BRI was launched in 2013 shortly after Xi came to power. It is a broad framework of activities, led mostly by Chinese provincial governments and state-owned enterprises (SOEs), that seek to address surpluses of capital and labour in China – challenges that have the potential to threaten the control of Xi and the CPC over the country.
Like China’s ‘Great Western Development Project’ and the ‘Going Out Strategy’ before it, the BRI is seeking to fight off and address these crises through geographic expansion and spatial reorganisation, allowing for new ways of recombining capital and labour productively in the pursuit of profit, according to a recent report by the Trans National Institute (TNI) entitled, “Selling The Silk Road Spirit: China’s Belt and Road Initiative in Myanmar”.
The campaign-style mobilisation of the BRI allows Chinese provincial governments and SOEs to pursue their own profit- and growth-driven agendas. As a result, however, governance of the BRI is fragmented and the central Chinese government has limited control over its rollout, according to TNI.
Since 2013, the project that originally envisioned connecting Europe and Asia by land and sea has expanded to include all continents and across all oceans. Countries as far away as Argentina, Fiji and Madagascar are now participating in the BRI. A ‘Silk Road on Ice’ seeks to open the Artic route to transcontinental sea shipping and an airport is being planned for Antarctica.
The Chinese government has banned maps of the BRI to avoid limiting the scope of the initiative, according to TNI.
ADDING GLOSS TO A DRACONIAN SYSTEM
The process gives a formal name to Chinese outreach that has long been underway since the mid-1970s with decidedly mixed results.
Many countries, including Myanmar, Pakistan, and Sri Lanka, have fallen for the Chinese embrace because at surface level the BRI offers development and trade opportunities at a time when local coffers are stretched and amidst the realization that the world’s second-largest economy has something to offer, not least the funding for development projects.
None of this would have been predicted way back when Chinese leader Mao Zedong created the People’s Republic of China in 1949 out of the fires of civil and world war. Mao’s picture dominates the Middle Kingdom today, his “mistakes” committed during the Great Leap Forward and the Cultural Revolution that led to millions of deaths now conveniently swept under the carpet within the confines of mainland China.
It is hard to ignore the developmental revolution that has taken place in China over the last three decades, initially spurred by Chinese leader Deng Xiaopeng. Deng embarked on a Chinese path to capitalism in which he famously claimed that “to become rich is glorious”.
China supporters – both local and foreign - trumpet the massive developments in mainland China that have erected modern gleaming cities, provided the world’s highest quality train system and lifted hundreds of millions of people out of poverty.
Massive development in the physical realm cannot be denied.
But arguably there is a serious problem. Today, the dictatorship of the Chinese Communist Party oversees capitalism with Chinese characteristics, where “development” is used as an excuse by supporters to paper over the negatives of a modern Orwellian regime judged guilty internationally of human rights abuse targeted at minorities and political dissidents and one that keeps an eagle eye on the masses through its high-tech and intrusive “social credit system” that attempts to control thought, word and deed.
Crucial to this evolving state of China is President Xi who came to power in 2012 and has effectively engineered a coup in removing limits to his presidential tenure that in theory could see him pursue this programme for decades.
Critically, Mao Zedong’s Middle Kingdom focus has made way for Xi’s world vision that does not stop at China’s borders, with thousands of copies of his white book, “Xi Jinping: The Governance of China, Volume 1”, found in book stores around the world, merely the tip of the iceberg in promoting Xi thought.
The question amidst this propaganda outreach is whether the world is falling for Xi’s spell.
ART OF WAR
One Western expert who has carefully studied China’s BRI plan for the world says many fail to recognize that the Chinese approach to strategy for this project is essentially guided by the philosopher Sun Tzu’s “Art of War”.
Central to this approach is the creation of distractions and allowing others to think you are weak to subdue an enemy without fighting, writes Andre Wheeler in one of his many articles on the BRI. Central to this is China’s BRI policy that is part of a 100-year plan to restore Chinese pride to a time in which China was an economic powerhouse, namely during the Silk Road era, he says.
A key ingredient to the BRI is infrastructure development that facilitates trade and opens access to markets previously isolated. The focus of the BRI is pairing of port and rail and inland connections where the maritime silk road meets the inland belt trade corridors, Wheeler adds.
A number of commentators have noted China’s savvy low-key foreign policy approach in attempting to win friends and influence countries. In contrast to Washington’s carrot and stick approach, that includes devastating wars in Afghanistan, Iraq and Syria, Xi is trying to use “soft power” - a combination of money, development and influence - to reach out with what appears as a hand of friendship.
It’s a seductive formula. But, as some critics have commented, it would appear to come at a cost to the countries or territories embraced.
China’s foreign development projects - whether under state-owned or private enterprises - have a tendency to seize control, impose debt burdens, push out local people, damage the environment, import Chinese labour, and impose Chinese-run entities that put stress on the recipient.
But many are waking up and becoming more assertive in the face of old styles of Chinese diplomacy presented in a new wrapping.
Myanmar has many reasons to look to their neighbour for support but also has experience that should set off warning bells – both for the government and at the grassroots level.
Prior to the unveiling of the BRI project, Chinese investment and projects in Myanmar have been marred in controversy, including the Myitsone Dam project in Kachin State that was put on hold in 2011 by the former government of Thein Sein, and the furor and protests over the Chinese-run copper mine in Letpaduang that saw farmers pushed off their land and damage to the environment.
While these projects came before the unveiling of the BRI, their modus operandi and flaws point to a highhandedness and dismissal of local concerns, highlighted recently by the alleged arrogant manner in which the Chinese Ambassador to Myanmar dressed down ethnic armed organization opponents of the Myitsone Dam in private talks.
Important to keep in mind is that contrary to the image of President Xi pulling the strings as puppet-master of a grand blueprint for a modern-day Silk Road, Beijing actually has limited control over Chinese SOE projects abroad that come under the BRI umbrella.
The Chinese government has even less control over activities by non-state-owned enterprises and locally branded ‘BRI projects’, according to TNI. For example, the development of the Shwe Kokko ‘special economic zone’ in the Kayin Border Guard Force area of Kayin State is an example of a self-branded BRI activity. It is being developed by Myanmar Yatai International Holding Group, a private company based in Hong Kong. The project has faced widespread criticism for illegally employing Chinese workers, running illegal gambling and other questionable activities.
The international isolation of Myanmar in 2017 following military actions to “flush out Muslim terrorists” in Rakhine State that resulted in an exodus of more than 700,000 Rohingya Muslims provided the Chinese government with an opportunity to refocus their relationship and to essentially repackage projects in Myanmar under the new CMEC, the key mechanism for the BRI in Myanmar.
Having learnt from previous experiences in Myanmar, Chinese investors, the Yunnan provincial government, and the central Chinese government have made efforts to publicise the positive impacts of the BRI. However, the CMEC projects have not avoided the challenges facing foreign investment in Myanmar and progress has been slow, according to TNI.
JEWEL IN THE CROWN
It is therefore with close scrutiny that the Kyaukphyu deep-sea port and related Special Economic Zone (SEZ), together with the oil and gas pipelines and planned communications infrastructure, high-speed train, and an expanding corridor of Chinese entities and influence need to be assessed.
Myanmar matters to China. Kyaukphyu deep seaport is viewed as the jewel in the crown of the China Myanmar Economic Corridor (CMEC), the second trans-national BRI corridor after the China Pakistan Economic Corridor.
The CMEC corridor helps China with its Malacca Dilemma – finding a shorter communications alternative to the Malacca Strait and the potential for this shipping route to be held hostage should hostilities break out with the United States.
The construction of the Kyaukphyu deep-sea port has been the subject of serious negotiations. Myanmar last year succeeded in slashing the cost of the port from $7.2bn to $1.3bn, although public details of the framework deal, as with other Chinese-led projects in the country, are said to be scant.
China already holds the largest share, around $4bn or 40 per cent of Myanmar's foreign debt.
Billions of cubic metres of gas and millions of barrels of oil from off-shore rigs are already pumped each year from the Myanmar port across the country to southern China.
Beijing is now poised to cement its grip on the area with the deep-sea port, signed off in November last year, and an accompanying colossal SEZ of garment and food processing factories.
LACK OF TRANSPARENCY
Up to 40 projects were reportedly proposed by the Chinese government under the CMEC corridor but only nine have been agreed with the Myanmar side, according to TNI. Only three of these nine projects have been confirmed publicly, namely the Kyauk Phyu SEZ, the development of three border economic zones in Kachin and Shan states and the Muse-Mandalay Railway. It should be noted that both the Kyauk Phyu SEZ and the Muse-Mandalay Railway predate the BRI. Without details of the other six projects, it is difficult to assess the full scope and impact of the CMEC, and the initiative continues to be characterised by a lack of transparency, notes TNI.
Economist and government advisor Sean Turnell recently commented that fears of the project turning into a debt-trap for Myanmar are no longer valid. The country would not be "on the hook" if the venture failed, he told AFP - in other words, Myanmar would not take on any outstanding debt.
Yet what is clear is that the port and the pipeline and communications infrastructure come with a cost to local people displaced or negatively affected by the massive project. In addition, Chinese business and expat presence is growing in the corridor and in Mandalay, long a city where Chinese expats have put down roots.
As Myanmar commentators have noted, all this needs to be assessed in terms of how it will affect Myanmar long term – and here it is wise to consider Chinese time, considered in decades, even centuries.
Myanmar needs to cast a wary eye on other countries involved in Chinese outreach.
The island of Sri Lanka off the coast of India has been caught up in the controversy that swirls around China’s BRI project.
Sri Lanka is often portrayed as a country that fell into a debt trap as a result of public investment projects financed by China, writes Umesh Moramudali in The Diplomat. One such investment project was Hambantota port, which was leased to China Merchant Port Holdings Limited (CM Port) for 99 years for $1.12 billion in 2017. This project is largely the reason why Sri Lanka is widely cited as a clear example of getting trapped in Chinese debt and being forced to hand over assets with national and strategic importance to China.
While there is some truth in this assertion, and this is not the first time that countries or territories have got themselves in hot water over a debt burden to China, the Sri Lankan economy is struggling, with debt owed to China ranking at only about 10 per cent of the country’s total debt.
As Moramudali writes, the debt owed to China is, in fact, the tip of the iceberg, and that should make the country’s overall debt crisis all the more alarming. The famous Hambantota port deal is not merely an issue of Chinese debt — Sri Lanka has much larger economic issues that go well beyond the debt owed to China.
The port in Sri Lanka has become a lightning rod as China, India, Japan and the US jostle for influence in the Indian Ocean.
China's economic clout in Sri Lanka has unnerved Washington, New Delhi and Tokyo, according to a Colombo-based diplomatic source, speaking to Asia Nikkei, noting that US diplomats were livid after the Hambantota transfer, and they are still monitoring the port project.
Ray Ren, the Chinese chief executive officer of the Hambantota International Port Group that manages the port was at pains to stress in a recent interview with Asia Nikkei that the port will welcome not just Chinese but all investors. "We want to be here and be part of the development of the country for the long term, that's why we've invested billions [of dollars] in Sri Lanka; we are not looking at short-term business," the magazine quotes him as saying.
Sri Lanka clearly has debt and sovereignty issues to deal with concerning China – but the problem may not be as acute as earlier publicized.
KENYA AND MEDIA FALLOUT
China’s BRI project includes outreach to the massive continent of Africa to tap into the natural and human resources and markets there.
But, as studies show, racism has rattled Chinese projects in the continent of Africa. Chinese ex-pats arrive with hierarchical views of culture and race that tend to place Africans at the bottom, according to Howard French, a former New York Times correspondent who wrote the 2014 book “China’s Second Continent,” which chronicles the lives of Chinese settlers in Africa.
Accusations of discrimination have even emerged on a major state-sponsored project: a 300-mile Chinese-built railroad between Nairobi and Mombasa, according to The New York Times. Replacing an antiquated rail system, the Chinese train has become a national symbol of both progress and Chinese-Kenyan cooperation, though positive reviews have at times been overshadowed by concern over its massive $4 billion price tag.
But in July of this year, The Standard, a Kenyan newspaper, published a report describing an atmosphere of “neocolonialism” for Kenyan railway workers under Chinese management. Some have been subjected to demeaning punishment, it said, while Kenyan engineers have been prevented from driving the train, except when journalists are present.
Attitudes and treatment of African partners matter. A ruckus burst out on social media this year after the Chinese boss of a company in Kenya was caught on camera calling Kenyans and the Kenyan president “monkeys”. The video went viral and eventually, the businessman was deported to China.
Sadly, this is just one instance of an attitude that is allegedly pervasive amongst Chinese ex-pats across Africa, according to author French.
While many of the Chinese projects are not directly linked to the BRI or were started years beforehand, the attitudes and behaviour do not bode well for the future as the BRI project expands in Africa in what has been described as a “resource grab” by China.
THE THOUGHTS OF CHAIRMAN XI
It is important to recognize that the BRI project should not be looked at in isolation but considered as part of China’s outreach around the world and the driving force behind it, Chairman Xi.
Xi is promoting what he calls the “Chinese Dream” – the rejuvenation of the great Chinese nation, currently numbering 1.3 billion people. As author Elizabeth Economy notes, what sets him apart from his predecessors is the dramatic centralization of authority under his personal leadership, the intensified penetration of society by the state, the creation of a virtual wall of regulations and restrictions that control the flow of ideas, culture and capital from abroad, and the significant projection of Chinese power.
As the author says, Xi seeks to project power in dramatic new ways and reassert the centrality of China on the world stage.
Xi has been bold in exploiting a strategy of carrots and sticks around the world, according to experts tracking his trajectory from communist cadre son who lived in a dirt cave during the Cultural Revolution and moved up the ranks to helmsman. This includes China’s approach to neighbours, such as Myanmar, as well as countries far afield.
Xi is pursuing a hearts and minds strategy that attempts to bring China centre-stage in the world.
Many countries are loathe to challenge China on human rights, for example, as they may lose preferential treatment in the country’s large market. Western companies, including Facebook and Google, have bent over backwards to put themselves in the good graces of Beijing, though not always with the desired effect.
Thought and information come under this rubric. Xi has called on Chinese nationals abroad to “tell China’s story well” and Beijing’s embassies encourage the growing Chinese student bodies on campuses in the West to silence competing narratives, according to the BBC. Chinese students abroad have grown more active on campuses in countering “anti-China” demonstrations, not least clashing over the polarizing issue of the months-long Hong Kong protests.
What may be less obvious are the efforts by Beijing to infiltrate foreign schools and universities, in part through a programme of Confucius Institutes and Chinese language learning programmes. Efforts have also been made to encourage Western universities to “rewrite Chinese history” and to promote a sanitized version of modern-day China. Issues like repression in China’s Xinjiang and Tibet Autonomous Region or the clampdowns on Christians should not be discussed and are typically dismissed as “fake news” .
All this is part of a long-term vision marked in decades and more, at a time when most politicians around the world are focused on short terms in office. Xi has set China’s eyes on the prize that by the 100th anniversary of the founding of the Communist Party - 2021 - China would become “moderately prosperous” and by the 100th anniversary of the communists coming to power - 2049 - it would be a “fully developed, rich, and powerful” nation, according to the BBC.
And the BRI and Chinese outreach are crucial components in going beyond the borders of China in a “soft-power” push.
But push-back is underway. And the limits to Chinese outreach are beginning to show.
LATE TO THE GAME
The United States and the European Union are coming late to the game and were initially outflanked by China’s BRI outreach. But what is clear is that China’s development splurge has spurred other countries to get more involved in the transport, trade and communications game and therefore benefit.
As author Parag Khanna writes in Politico magazine, the fashionable position in Washington today is to dismiss the BRI as a power play that won’t last, what they portray as an attempt at neocolonial debt-trap diplomacy, in which China uses unpayable debts to control less powerful states, that is ultimately destined to collapse under the weight of financially spurious projects. On the other hand, there are also those who view BRI as a serious threat—a sign of China’s continued quest for global hegemony and the presence of a new Cold War between the US and China.
Khanna says that either way, the US position so far has been to shrug at China’s new initiative but in this Washington is making a grave mistake.
Khanna, the author of “The Future Is Asian: Commerce, Conflict, and Culture in the 21st Century”, says that although American critics tend to see it either as a doomed scheme or a strategic threat, what’s really happening with the BRI plan is more complicated—and even offers the United States the chance of a payoff, regardless of China’s success.
The BRI project is already opening new and expanding markets to American companies. And, diplomatically, it presents an opportunity to help steer countries clear of excessive dependence on China. Belt and Road, then, might well bring about the outcome least expected: a Eurasia that is more multipolar rather than less—if that is, America engages rather than sits on the sidelines, Khanna argues in Politico.
The BRI has already begun having effects across the region, and not always the ones that China intended. Countries from Myanmar to Pakistan have seen modernization drives and the controversy over the potential debt burden has alerted countries to the danger posed by becoming too caught up in China’s embrace.
Notably, it has sparked the rise of what author Khanna terms a “welcome infrastructure arms race” in which Japan, India, Europe and even, belatedly, the US are starting to actively compete with China to finance productive infrastructure and help BRI members to eventually resist Chinese dominance.
While China’s competitors may have been slow to join in the game, there are indications countries are waking up to the dangers – and the opportunities – sparked by China’s grand scheme.
FORGET US VS CHINA
Xi may well have a vision of righting the wrongs imposed on China by Western Imperialism lifetimes ago. But as author Khanna points out the greatest fallacy permeating geopolitical discourse today is the notion that the 21st-century world must choose between American or Chinese leadership.
The irony is China is overstretching itself as its economy struggles and the BRI dream may have injected life into a range of complementing and competing development schemes across a region now dubbed Afroeurasia.
Lessons are being learned from the experience of Chinese outreach, even though some politicians are lining their pockets with Chinese money. As Khanna says, China is rising into a world that is already multipolar; it doesn’t displace incumbent powers such as America and Europe - whose economies are still equal or larger than China’s - and cannot prevent the rise of India nor easily subdue Japan, South Korea or Australia. What is clear is that China existentially feels the need to diversify its trade routes to Europe, the Middle East and Africa in order to survive.
What is crucial to understand is the Chinese Communist Party leadership is pushing the BRI project in response to the fear that the Chinese economy could seriously suffer without pursuing this development outreach and the threat this could pose to their grip on power. Xi fears a restless proletariat.
What is gradually becoming clear is that Xi could both win and lose with the BRI – win in the initial project outreach but in some senses lose long-term as other countries muscle in and help “lift all boats” in a more interconnected and efficient world.
Citigroup just published an analysis titled “China’s Belt & Road at Five” that documents how the BRI is graduating from a Sino-centric “one-to-many” model to a more multidirectional and inclusive “many-to-many” pattern, according to Politico.
MESSAGES FOR MYANMAR
For those countries that engage with China, lessons are being learned in terms of insisting on a level playing field.
In Myanmar, renowned economist U Myint has deeply studied the BRI and its potential effects on his country and calls for a more collaborative approach that includes the voices of local people who could be ousted or negatively affected – as seen in the controversial rollout of the oil and gas pipeline, and the skewed original plan for the Myitsone Dam project – now as good as dead – that saw China holding the lion’s share of the deal.
It is understandable that the current Myanmar government is leaning towards neighbouring China when it comes to development options, investment, border issues and help in resolving the intractable peace process. In part this is due to the perception that Washington has dropped the ball when it comes to foreign policy and Myanmar, in part because of the tenure of President Donald Trump and because of the negativity thrown up in response to the Rakhine crisis.
Myanmar’s leaders may be waking up to the challenges of dealing with China in a way that safeguards Myanmar interests. Nay Pyi Taw is engaging more with India and Thailand when it comes to development and communications projects.
Clearly, Myanmar needs to do some soul-searching when weighing up the magnitude of what the BRI and CMEC will mean for Myanmar decades or even a century down the line, once a substantial part of the country’s territory become effectively Chinese business and residential regions – an important soverienty question that few if any are considering.
But change is in the air.
Xi’s New Silk Road dream is less of a blueprint as a hodge-podge of Chinese development and business outreach that is being studied more critically by recipients and potential recipients attracted by the development or business opportunities but increasingly worried by the potential strings attached.
And so while China helmsman Xi may wax lyrical about his dream of a dragon stretching across continents, countries are waking up to both the threats and the opportunity of the beast unleashed in a more multi-polar world.
Sources include: Mizzima, Trans National Institute, Politico, BBC, New York Times, Global Times, Seatrade-Maritime.com, AFP
PART 1 in a series entitled SILK ROAD BLUES featured in Mizzima Weekly Issue 49 this week.
Check out Part 2 tomorrow