A Faustian pact?

Nicholas Nugent on a new book that explains, and questions, the sweeping global project that is China’s Belt and Road Initiative

China’s Belt and Road Initiative is a difficult concept to grasp. Is it aid to poorer countries or merely repayable investment in another country’s infrastructure for China’s benefit? How does it sit with more traditional engagement between wealthy and poor nations? The latest writer to try to explain the Belt and Road phenomenon is former Portuguese government minister Bruno Maçães.

Now living in the Chinese capital, Beijing, and teaching at Renmin University, Maçães is perfectly placed to observe at close hand China’s foreign and economic policy. Under the Belt and Road Initiative (BRI), the two are closely interlinked.

First expounded by President Xi Jinping six years ago, ‘Belt and Road’ is a far-reaching description of Chinese speculation in overseas transport infrastructure. Originally it related to the so-called ‘New Silk Road’ to transport Chinese exports to Europe through the heart of Central Asia. Later, the concept was extended to embrace China’s strategic transport corridors to Indian Ocean ports and to maritime trading routes, road and rail projects in Africa, Europe and beyond. ‘Belt’ refers to the land route through Asia and Europe, while ‘Road’ – ironically – refers to the maritime routes through and beyond the Indian Ocean.

Thus BRI is a blanket term covering China’s overseas investment. But is it investment, since debts owed by some countries have in part been forgiven, making it seem more like an aid project, albeit one with considerable benefit for China itself? There may also be a strategic benefit. China has set up a military base in Djibouti – ostensibly to protect its investment in the East African port – and allegedly intends further naval and land bases in Southern Asia and the Pacific, though there is no evidence it intends becoming a global military power like the United States – just an economic one.

In his new book Belt and Road – A Chinese World Order, Bruno Maçães posits the question as to whether the BRI will change the balance of global power, bringing about a shift from a US-centric world to one in which China, the world’s second most powerful economy, dominates. He sees the Indian Ocean as the centre of world trade, as it was in colonial times, and calls the BRI ‘the Chinese plan to build a new world order’, suggesting the term may take over from ‘the West’ as shorthand for the prevailing system.

‘The Belt and Road,’ he goes on, ‘is by design a project meant to encompass the whole world and the totality of human life’. China, he writes, is ‘a threat to a Western rules-based order’, and, in support of this argument, he quotes former US Secretary of State Rex Tillerson, who labels the BRI ‘a Faustian pact by which countries [have] sacrificed their independence for cheap loans’.

Maçães notes that the BRI has promoted China’s position as an economic powerhouse, helping the Asian giant export its overcapacity in steel production without downsizing steel mills or making redundancies. Building railways and bridges in other lands is contributing to China’s remarkable economic growth and hence to its power. The more China is responsible for creating trading infrastructure, asserts Maçães, the more it will be able to set the rules for international trade; hence the ‘Chinese World Order’ of the book’s title.

Coming as the US and China argue about rules governing world trade, specifically the imposition of tariffs, Maçães’s argument is highly topical – and not just for US-China relations. The BRI has already been embraced by most Asian nations and many in Africa, Europe and Latin America. Chinese investment is helping nations as diverse as Myanmar, Montenegro, Ethiopia, Egypt and Tajikistan build roads, railways and power stations they would not otherwise be able to afford. Projects worth billions of dollars are being financed by China in around 70 countries – more than a third of United Nations member nations.

For the world’s largest trading bloc, the European Union (EU), there are concerns about China’s methods, says Maçães. The EU launched an investigation into a planned China-financed high-speed rail link between two European capitals, Budapest and Belgrade, lest it violated EU competitive tender and transparency rules. Yet, at the same time, the bloc shares one of the BRI’s key objectives: to improve transport links between Europe and China.

BRI is not only about transportation ‘on the ground’ but also involves building a so-called ‘digital silk route’ to bring internet connectivity to countries with none. The technological prowess of Chinese firms such as Huawei and ZTE is benefiting both poor and developed nations. China, already a world leader in high speed railway and port construction, is on the way to leading in mobile telephone, facial recognition software and 5G internet technology. (It was reported recently that 66 per cent of cellphones in use in India were made in China.)

Maçães informs his readers that China regards the Belt and Road as a strictly economic project, while arguing that this claim is ‘belied by its own efforts to promote the initiative’. The jury is out on whether China is out to improve efficiency in world trade, or to change its rules and hence the balance of world power, as this author believes. If the latter were true, does it matter to anyone – except the traditionally dominant world power, the United States? Maçães makes a strong case that China is indeed supplanting the United States in world trade in this thought-provoking book.

Nicholas Nugent writes on Asian politics, diplomacy and trade   

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