China’s 'One Belt, One Road' To Where?

 

Why do Beijing’s regional trade and transport plans worry so many people?

The celebrated revival of the Silk Road would seem to herald the return of China’s charm offensive, winning over neighbors and other countries in the region through increased trade incentives and transport connectivity. If developing a sound soft power strategy is the mark of a rising world power, does this mean China is on its way? Certainly, in the wake of recent episodes of differences and disputes, the initiative should be seen as a welcome development. Nonetheless, some countries along the envisioned route remain wary and skeptical of the real intentions behind this offering, as well as the possible unfavorable conditions that may be attached to it. In addition, while Beijing tends to highlight its economic credentials, the Silk Road Economic Belt and 21st Century Maritime Silk Road (hereinafter, SREB/MSR) has strategic, political and security implications that participating countries would also be advised to consider.

China lives in a tough neighborhood, sharing a long contiguous land border with Russia and India (with which it has unresolved land boundary disputes) and a common sea boundary with Japan (with which it has unresolved territorial and maritime disputes). As such, SREB/MSR could possibly be seen as a strategy to circumvent any encirclement or containment that a hostile power in concert with other states may undertake to harm China’s interests.

The SREB/MSR project with its land and maritime path components promises to better connect China with the Middle East, Africa and Europe through its landlocked neighbors in Central Asia and the littoral states of Southeast and South Asia. It spreads the risk by multiplying access routes, thus reducing China’s vulnerabilities. The system of ports, railways and roads, which have variously been completed, or are under construction or being proposed, will enable China to diversify the routes by which it can secure the transport of oil and gas and other essential goods needed to sustain China’s economy. It enhances the country’s energy and economic security and mitigates the risks attendant to transporting fuel and goods through unstable, unsecured or unfriendly channels. For instance, the establishment or proposed establishment of transport corridors via Pakistan (through the Chinese-operated Gwadar Port, and then by proposed railway to link the Sino-Pakistani-built Karakoram Highway and ultimately western China), Myanmar (through the Kyaukphyu Port then through the railway and pipeline to Yunnan, which are under construction) and Thailand (through the proposed Chinese-funded Kra Isthmus project) will enable China to reduce its dependency on the Strait of Malacca chokepoint. Developing pipelines to get oil and gas directly from Russia and Central Asia  to power western China also reduces its reliance on the volatile Middle East.

Meanwhile, by linking the economies of Central Asia with western China, Beijing brings further development and stability to restive and relatively underdeveloped Xinjiang and Tibet and cuts off any potential support that Uygur dissident groups may seek from fellow Muslims in Central Asia. Hence, SREB/MSR goes far beyond simply sharing economic prosperity – it has obvious political and security underpinnings. And viewed from this vantage point, its China-centrism is very evident.

However, SREB/MSR also ushers in a lot of opportunities for countries along the way. Countries in need of financing to establish new ports or related transport infrastructure or to upgrade existing facilities would welcome news of a willing new sponsor or financier. China’s longstanding policy of no-strings attached would be popular with states that have limited access to capital and technology because of foreign-imposed sanctions or stringent governance requirements set by regional or international lending institutions. Increased regional connectivity would boost trade and commerce, allowing participating countries greater access to the huge China market, while attracting much-needed investments especially now that China had just become a net capital exporter. The emergence of China expands the roster of potential partners to which developing and underdeveloped states along the projected SREB/MSR route can turn. But for China to entice more countries to join, it has to address some important points.

For one, the increasing presence, role and interest of China in maritime Southeast Asia, South Asia, and Central Asia is becoming a source of discomfort for, respectively, the United States, India and Russia, which have long dominated these regions. SREB/MSR would draw these regions ever closer into China’s orbit and an observer may well wonder whether this will will eventually evolve into some sort of exclusive club led by China, intent on displacing other regional trade or economic arrangements founded and led by other regional powers. Countries in the region, in turn, which wish to diversify their partners and develop a balance or hedging strategy are now realizing that they can play one power against the other to exact maximum concessions from both. Indeed, some countries are beginning to make this a practice (Myanmar, Sri Lanka and Maldives in relation to China and India, the former Soviet Union republics in Central Asia in relation to China and Russia, and Southeast Asian states like Indonesia, Malaysia and Singapore in relation to China and United States). But this will only work so long as these regional arrangements are not mutually exclusive, meaning that membership in SREB/MSR does not necessarily require that they forego participation in new or existing regional organizations. SREB/MSR should be seen as a means to complement and not to compete with or dislodge existing regional cooperation frameworks.

Moreover, in the same way as countries in these regions do not want to be seen as taking part in any effort to contain China, thus compromising their burgeoning economic relations with Beijing, they also do not want to be perceived as facilitating Chinese efforts to check a rival. For example, Indian Ocean Region (IOR) states with warming relations with China would surely not welcome the thought of being seen by New Delhi as an appendage to Beijing’s “String of Pearls” strategy. China should reassure would-be participating countries that SREB/MSR will not be used as a geopolitical ploy to outmaneuver a rival power. Otherwise, countries will hesitate to participate, particularly if pressured by regional powers.

Similarly, there is the fear about the possible dual-use nature of MSR ports and facilities. For example, the recent visit of a Chinese submarine in Colombo, the rumored establishment of a Chinese naval base in Marao Atoll, Maldives, and Pakistan’s invitation for China to set up a naval base in Gwadar all raise fears that China’s presence in the IOR is not confined to just building and operating commercial seaports. If regional rivals see MSR as a strategy that would eventually lead to basing rights or easy access for PLA-N, they may take steps to discourage countries from participating in it, if not directly acting against it.

Second, China has to address the persistent notion that SREB/MSR is too China-centric and that other participating states will reap only marginal benefits. Will the ports and related transport infrastructure financed, built or operated by Chinese entities only service or handle China-bound cargo or those coming from China only? If host countries will be deprived of independent action in the management of said ports, it will only reinforce the image that SREB/MSR caters only to Chinese interests. Thus, it is important for Beijing to identify its stakes commensurate with its investments. While China may rightfully request for some preferential access in light of its investment, shutting off SREB/MSR ports to other countries may limit the revenues that host countries are able generate. It may also tie the host country too closely to Chinese trade volume and possible future exigencies. China will contribute in furthering economic regionalization by opening SREB/MSR ports to all participating states and even to non-participating states for that matter. For instance, China could offer access to Gwadar Port, the nearest seaport to Afghanistan and Central Asia, as one incentive to obtain Central Asian participation in SREB/MSR. The port could then be the conduit for these landlocked countries to export their products abroad, as well as obtain imports therefrom, thereby giving them a stake in securing the port and the terrestrial transport backbone that connects to it.  Thus, in defining the nature and terms of SREB/MSR investments, China has to take into serious account the interests of the host country. This would entail delicate compromise and negotiations since different countries would have different sets of  national priorities and valuations.

Finally, China has to address the question of which country will provide the security for NSR ports and related facilities. Will MSR membership by countries along the proposed route permit the deployment of PLA-N or Chinese coast guard vessels in IOR and maritime Southeast Asia? For IOR, this would create anxiety on the part of India, as well as the United States. For South China Sea (SCS) littoral states, on the other hand, the specter of Chinese naval and coast guard assets patrolling vital shipping sea lanes and waters adjacent to MSR ports may dissuade them from participating lest it be seen as jeopardizing their own territorial and maritime claims in the disputed sea. Territorial and maritime disputes generally cloud the judgment of many states, compelling them to disregard even obvious economic advantages. To address this, China may consider boosting maritime security cooperation with SCS states to jointly secure MSR infrastructure. This may include funding to support exercises and operations on search and rescue, combating maritime piracy and terrorism, responding to maritime pollution and marine environment degradation, and or even involving joint management of shared fisheries resources and joint development of offshore oil and gas and seabed minerals.

Most of the details of SREB/MSR remains sketchy and this may be to China’s disadvantage. The concept could easily be hijacked or maligned by other parties even before it takes off. Some may say that it is hollow rhetoric or a pledge without basis or enduring political and economic commitment. It will be difficult to entice countries to participate in an undertaking they know so little about. For these reasons, China will need to articulate the fundamental tenets of SREB/MSR to give more substance to all the grand policy talk. Of course, the fact that many details of SREB/MSR remains hazy could also have an upside –countries still have the opportunity to help shape its architecture in a way that is more agreeable and beneficial to all.

Lucio Blanco Pitlo III is a member of the Philippine Association for China Studies (PACS). He is a former Research Assistant at the University of the Philippines Asian Center and a former Technical Assistant at the Philippine National Coast Watch Council Secretariat. The views expressed here are the author’s own and do not represent that of his present and past affiliations.