China's Belt and Road Initiative
Since the fall of the USSR, the world has seen the emergence of the United States as a global superpower. However, there is a new country waiting to dethrone America: the People's Republic of China. For a long time, China has been the most populous country in the world. When Mao Zedong and the Communists took control, a massive industrialization period began. China now leads in the manufacturing sector and has become the second-largest world economy, only behind the USA. But China is looking to be the first through another route: global trade domination.
In 2013, during a conference in Nur-Sultan, Kazakhstan, Chinese President Xi Jinping announced China would “Reopen the Silk Road”. He proposed a trillion-dollar plan to spread economic prosperity and make trade easier called the Belt and Road Initiative. His idea was simple at first. China would build ports, rail lines, train stations, oil rigs, and more infrastructure across Eurasia and Africa. Six “economic belt” corridors would connect China to Europe and Africa, and a “Maritime Silk Road” would connect the belt and road at ports. In return, goods and oil would get to China a lot easier and the countries would pay China back for the money it owed. It was also attractive because, for foreign investment to happen with the West, there needed to be regulations and workers' rights. However, China was attractive because it would work with less democratic countries. It seemed like a win-win situation for these countries and China. Then things started to move.
A multi-billion dollar deepwater seaport in Sri Lanka. A highway in the Pakistani Himalayas that connects to China and eventually leads to a port near Gwadar. Oil pipes across central Asia entering the Gobi desert. A high-speed rail network in Vietnam and Laos. All of these were built by China and Chinese firms. Today, over 130 countries have supported the initiative, and over 60 countries have accepted deals with China. Since the infrastructure initiative has begun, countries have seen significant GDP growth. Countries like Pakistan and central Asian countries have seen their economies increase in percentages never before even thought of as a possibility for those countries. Chinese construction firms and contractors were all hired as well, giving a boost to Chinese job growth and a boost in general to the economy.
All of this looks great, but what's the catch? Before discussing, it is essential to know how loans work on this diplomatic size. When a country loans money to build a facility or rail system to a country and the receiver can not pay it back, the lender can lease the facility until the receiver can pay it back. This is exactly what China did. In Sri Lanka, China loaned over a billion dollars for the port to be built. When Sri Lanka could not pay China back, China simply took control of the port instead. The same happened in Gwadar, Myanmar, and Uzbekistan. The countries told China they could not pay them back, so China then took control of the facilities. This is no accident. Looking at the list of countries China has loaned to, there are some rather questionable countries: Yemen, Iraq, Afghanistan, Myanmar, and Uzbekistan among them. All of these are in conflict or ranking as the most corrupt countries in the world. So why did Chana invest? It was on purpose to expand its sphere of influence. China knew these poorer, corrupt countries would never be able to pay them back, so it made these loans with a plan for them to fail. The receiver can't pay it off, and now China receives complete control. Let's look at the port in Gwadar and the highway connecting it to China, one of the six “corridors” of the belt. Oil would pass through the Strait of Hormuz, go through Indochina and the South China Sea and end up on the mainland. However, the ships now drop oil off at Gwadar and send it straight to China. Huge economic benefit for Beijing.
However, economics is not the only part of the Belt and Road initiative. The other part is the military. With control over key points in the Indian ocean, China can do what they want at the ports, including setting up its navy. This has been known as the String of Pearls theory: they are going to take complete control of the Indian Ocean trading routes.
Critics argue that this debt entrapment is very harmful towards the countries China does it to. Many see it as neo-colonialism and modern-day imperialism. However, supporters counter by saying it is creating new opportunities for everyone. As Trump's “America First” policy slowed down American investment in Asia, the continent has had a power vacuum for an economic juggernaut. It looks like China is the perfect fit for that role.
China's Trillion Dollar Plan to Dominate Global Trade. Vox, www.youtube.com/watch?v=EvXROXiIpvQ.
How China Is Weaponizing the Belt and Road Initiative. www.youtube.com/watch?v=PX5PnnnYrFw.
“Project Overview.” Belt and Road Initiative, www.beltroad-initiative.com/projects/.
says:, Jc Hulin. “The Belt and Road Initiative and Xi Jinping's Foreign and Domestic Policy Agenda.” Asia Dialogue, 27 Oct. 2019, theasiadialogue.com/2019/10/29/the-belt-and-road-initiative-and-xi-jinpings-foreign-and-domestic-policy-agenda/.