BRI is not globalisation but Chinese dominance, control, penetration and resource extraction

by John Dobson

London: Seduction is a powerful weapon and nothing seduces governments more than money. When President Xi Jinping announced China’s massive infrastructure project, One Belt One Road Strategy in 2013, it soon became clear that there was a problem with the title. Seduction is best carried out covertly, and the word “strategy” raised the suspicion of “dominance”, and “one” was seen as “China”. In other words, OBOR was interpreted as “Chinese dominance”, which gave the game away. So instead, Beijing in 2016 settled for the more discreet term Belt and Road Initiative (BRI), seduction with an inscrutable Chinese smile. Nowadays, however, many countries seduced by BRI are beginning to realise it should really have been called Belt and Debt Initiative. The “belt” has turned out to be a constraint on their sovereignty and the “road” has led them to a debt trap.

So, seven years after the launch, how is one of the most ambitious infrastructure projects ever conceived progressing? Beijing boasts that the official list of participants is up to 138, more than two thirds of the countries in the world. However, the open nature of BRI and the lack of precise definition of what it means have led to vaguely-worded MOUs between China and recipient countries, making it difficult to quantify the level of Chinese penetration. In the early days, BRI became an economic feeding frenzy, with a torrent of Chinese firms, both state-owned and private, flowing across Asia, Europe and Africa, recklessly spending hundreds of billions of dollars on development deals. Many projects were designed and implemented on the basis of a scattershot approach, leading to a spending spree of unprecedented proportions.

With upward of a trillion dollars to be spent over a period of ten years, boosting economic development in globalisation’s final frontiers, BRI was welcomed by many emerging markets with open arms. But now the proverbial chickens are coming home to roost, as in some markets Chinese investment has become a euphemism for wasteful spending, environmental destruction and untenable debt. Many major projects are currently strewn around the world in half-finished disrepair and the opportunities that were sold to local populations un-materialised. A number of projects have been marred by delays, financial implosions and occasionally violent outpourings of negative public sentiment.

Even before the arrival of COVID-19, several countries had woken up to the risks inherent in their grandiose BRI hopes. Malaysia, Myanmar, Pakistan, Sierra Leone and Kyrgyzstan, to name but a few, had cancelled, downsized or postponed many key BRI projects. When re-negotiating $23bn in rail and pipeline deals in 2018, Malaysia’s Prime Minister Mahathir warned that BRI had become a “new version of colonialism”.

Serious concerns about debt sustainability were raised by developing countries, who suddenly realised that 40% or more of their external debt was owed to China. The Centre for Global Development reported that eight BRI recipient countries, including Pakistan, were all at a high risk of debt distress due to BRI loans.

Pakistan is of particular interest as some observers, echoing Mahathir, see Pakistan becoming a pseudo-colonial province of China because of the debt trap it has been lured into. Pakistan’s largest province, Baluchistan, could even have a majority Chinese population by 2048, a realisation which is already sparking unrest among its indigenous population. The China-Pakistan Economic Corridor (CPEC) covers projects between China’s Xinjiang Province and the Pakistan port of Gwadar and is the flagship of the six economic corridors within the BRI. Almost seven years after CPEC was established, less than one-third of announced projects have been completed, even though some 40,000 Pakistani and more than 80,000 Chinese workers have been busily working on them. Last month, Pakistan’s Prime Minister, Imran Khan, attempted to put a gloss on the matter when he vowed that his government would complete the $62 billion project “at all cost”, despite the crippling effects of COVID. Khan realises that this “cost” might be unbearable and has already started discussions with the IMF for a potential bailout, forgetting that the IMF has repeatedly warned countries attracted by China’s money not to be seduced into unsustainable debt caused by China’s predatory lending and lack of transparency.

China’s predatory lending and “debt trap” are common themes currently running through the vast continent of Africa. African governments owe China more than $150 billion, and although a number of small debts have been written off, many countries were in trouble even before the catastrophic financial effects of COVID arrived. COVID has increased financial pressures to almost breaking point. Kenya, for example, owes China $6.5 billion and is already using a third of its diminishing revenue to service this debt. African countries rich in natural resources, such as Angola, Zambia, and the Republic of the Congo, or with strategically important infrastructure, like ports or railways such as Kenya, are most vulnerable to the risk of losing control over important assets in negotiations with Chinese creditors. The fate of the Sri Lankan port of Hambantota should serve as a warning of “debt-trap diplomacy”. The ratings agency, Moody’s, has repeatedly warned that recipients of BRI money would lose control of assets if they could not repay their debts. But no-one was listening. Politicians only heard the splashing of cash, some believing it to be free money.

China is now turning its BRI attention to Iran, with reports last week of a potential major investment flow offering new life into a sanctions-choked Iranian economy. With nowhere else to turn for foreign investment, Iran desperately needs Chinese cash and in return China would get a guaranteed supply of cheap oil and an influential presence in one of the world’s most unstable regions. The leaked draft of the potential deal includes Chinese-built airports, high speed railways and subways, together with increased collaboration on defence and intelligence. It was, of course, President’s Trump’s intemperate withdrawal from the nuclear deal with Iran which has given China a geopolitical open goal to establish a firm presence in the Middle East. There is even fanciful gossip of China purchasing Iran’s Kish Island, a 91-square-kilometre island with an international airport off the coast of Iran in the Persian Gulf, creating a new Hong Kong in the Middle East! A more likely Chinese development would be the port facilities at Jask, located at the entrance to the Persian Gulf, giving it a strategic vantage point on waters through which much of the world’s oil transits. If the proposals become reality, China would invest an eye-watering $400bn over 25 years in Iran, leaving the country colonised and inescapably beholden to Beijing.

Which of course exposes the real strategy of BRI. Despite China’s denials, BRI’s investment and return is just one aspect of its giant act of international political engineering. BRI is Xi’s flagship project to seductively cement his name and ambitions in China’s history, while rebalancing the global order towards the Middle Kingdom. Conveniently for China, its BRI “soft power” charm offensive is greatly assisted by President Trump’s reckless decision to withdraw from numerous world institutions, resulting in America becoming smaller and smaller. In the words of US Senator Mendez last week when Trump formally withdrew from the World Health Organisation: “in the midst of a pandemic, it leaves Americans sick and alone”.

While America’s prestige and credibility have been grievously damaged by the current incumbent of the White House, China has become increasingly assertive. China pays no respect whatsoever to western pieties about human rights and under Xi Jinping, emperor for life, China’s status as a superpower and a despotism is complete. The control over the sovereignty of countries desperate to renegotiate BRI debt repayment, hugely increased by the financial problems of COVID, has given Xi leverage against any form of criticism of his autocratic style of governance.

This became clear several years ago when he incarcerated millions of Muslim Uyghurs in concentration camps in their native Xinjiang province. Claims of indoctrination, forced organ transplants and even forced sterilisations and abortions, have led to charges of genocide and crimes against humanity, charges which have been met with deaf ears by China. Although there is growing global condemnation of China, it is noticeable that Muslim countries such as Pakistan, whom you would expect to lead in the condemnation of the treatment of their brother Muslims, are silent, terrified of offending their financial masters. Such is the power of BRI.

The leverage continues. Early this month, statements from the UN Human Rights Council in Geneva shed light on the geopolitical currents far beyond the walls of that institution. China’s Foreign Ministry and state media declared victory after 53 countries backed Beijing’s new national security law for Hong Kong. Just 27 criticised the law, which imposes harsh penalties for vaguely defined political crimes and is widely viewed as the death knell for Hong Kong’s autonomy. Drilling down into the voting list reveals that China was backed by an assortment of “not free” or “partially free” countries, including many of the world’s most brutal dictatorships—North Korea, Saudi Arabia and Syria. No less than 43 of the others supporting China had significant BRI debt. Beijing has effectively nobbled the UN Human Rights Council to endorse the very activities it was created to oppose.

India has been strongly arguing for many years that the implications of BRI in general, and CPEC in particular, are immense and worrying, not just for India but for the wider world. BRI is not globalisation but Chinese dominance, control, penetration and resource extraction. Classic colonialism.

For China, however, the massive Belt and Debt Investments are bearing fruit and paying dividends. The inscrutable smile looms large over the globe. Be afraid.

John Dobson is a former British diplomat and worked in UK Prime Minister John Major’s office between 1995 and 1998