Chinas Road Rules

While the eyes of the world focus on Chinas aggression in the seas to its east,
Chinas leaders are looking west. At the end of March, Chinas National
Development and Reform Commission joined its ministries of foreign affairs and
commerce to release an expansive blueprint for what it calls the Silk Road Economic
Belt and the 21st-Century Maritime Silk Roadoften shortened to One Belt, One
Road. If successful, the ambitious program would make China a principal economic
and diplomatic force in Eurasian integration. One Belt, One Road calls for increased
diplomatic coordination, standardized and linked trade facilities, free trade zones
and other trade facilitation policies, financial integration promoting the renminbi,
and people-to-people cultural education programs throughout nations in Asia,
Europe, the Middle East, and Africa. Some have characterized it as Chinas Marshall
Plan, but Chinese leaders reject the comparison. As they see it, what they are doing
is integrating Eurasia rather than drawing dividing lines, and focusing on economic
growth rather than political influence. Yet therein lies the danger; if China does not
skillfully balance investments and diplomacy with its search for political influence, it
may find itself tangled in conflicts for which it is not prepared.
Although the exact details of One Belt, One Road vary by map to map and proposal
to proposal, generally, the overland belt, comprising roads, rail links, energy
pipelines, and telecommunications ties, seeks to link China, Central Asia, the Middle
East, Europe, and Russia. The maritime road will sail from Chinas coasts through
the South China Sea, the Indian Ocean, the Red Sea, the Mediterranean Sea
(through the Suez Canal), with stops in Africa along the way. One Belt, One Road
builds on earlier calls by Chinese academics to march West as a response to the
United States strategic pivot to Asia. The name of Beijings dual programs harken
back even further, to the ancient Silk Road, recalling Chinas historical role in trade
promotion between Asia and Europe. Chinese President Xi Jinping officially
announced the belt in a September 2013 speech in Kazakhstan and the road
during an October speech in Indonesia that same year. Funding will draw from the
controversial $50 billion Asian Infrastructure Investment Bank (AIIB), the $40 billion
New Silk Road Fund, and the New Development Bank initiative between BRICS
nations. Chinas leaders calculate that the programs will touch 4.4 billion people in
more than 65 countries, and that annual trade with participant nations could climb
to $2.5 trillion within a decade. An editorial in the South China Morning Post called it
the most significant and far-reaching project the nation has ever put forward. If
China does not skillfully balance investments and diplomacy with its search for
political influence, it may find itself tangled in conflicts for which it is not prepared.
The One Belt, One Road strategy advances a number of Chinas domestic goals that
align with Xis China Dream of national rejuvenation. First among them is
bolstering the Chinese economy by providing an outlet for excess industrial
capacity. As Beijing tries to cool an overheated domestic infrastructure sector
without creating massive unemployment, plans that channel investment-led growth
beyond China will be key. Inside Chinas borders, the plans focus on Chinas
relatively underdeveloped western and southern regions, which will help accelerate
growth and boost employment there, moves which leaders hope will tamp down
ethnic unrest in addition to providing jobs and an outlet for the nations workforce.
Outside of its borders, China seeks to benefit from trade and currency swaps
reinforcing the international power of the renminbi as a global trade currency.
Securing energy deals will help ensure unimpeded supplies as Chinas energy
demand continues to rise; land-based energy infrastructure specifically can help
ease a crippling reliance on sea-borne shipments. With growth in developed
economies still sluggish, China sees Asias developing economies as sources of
growth on its doorstep. One Belt, One Road serves foreign policy goals as well by
deepening relationships with Chinas neighbors. The dual plans will also expand
Beijings ties to major developing countries, and build support for a reshaped
international system that puts China at the center of world power. Chinas growth
has prompted the nation to reluctantly embrace its foreign policy obligations, and
the trade program will allow Xi to pursue his community of common destiny
program, a vision for shared Asian growth in the coming decades. Strengthened
bilateral ties with nations along the dual trade routes will support Chinas ambitions
to build a network of non-Western international organizations in which China plays
the main, if not dominant, role.
Organizations such as the Shanghai Cooperation Organization and the Conference
on Interaction and Confidence Building in Asia would allow China to pursue
international diplomatic primacy outside of Beijings relationship with Washington.
One Belt, One Road seems to be gaining momentum since Xi first introduced it. The
plans have strong financial backing, particularly through Chinas vaunted AIIB, and
the support of Chinas political and economic elites. But huge stumbling blocks still
remain, and could challenge Chinas ability to realize its ambitions. While efforts to
fill Asias infrastructure gapestimated at $8 trillion through 2020are welcome,
lax lending standards could undermine progress. Should nations use the funding to
pursue illogical or unfeasible development projects related to One Belt, One Road,
Chinese investments will suffer as debtors struggle to pay back loans. In addition,
projects that come with unexpected environmental or human rights scandals could
dampen Chinas perception as a benign actor on the global stage. In the maritime
sphere, although Chinese efforts to upgrade port infrastructure along the route and
proposed free trade zones can add trade capacity for participating nations, it is not
yet clear how the maritime road will supplement existing shipping lines.
The success of One Belt, One Road projects will depend on the cooperation of
capricious regional and local leaders. Many leaders, especially in Central Asia and
the Middle East, draw from centuries of experience playing foreign powers off one
another to gain personal political and financial advantage. Amid intensifying
sectarian conflict in the Middle East, for example, Chinese leaders are likely to find it
increasingly difficult to balance Chinas longstanding ties with Iran and burgeoning
relations with Sunni states, led by Saudi Arabia. Sri Lankas recent decision to
review more than two-dozen projects with Chinese backing provides another case in
point. Challenges posed by non-state actors layer on additional political risks that
China is unaccustomed to handling. The Taliban in Afghanistan, the Islamic State
(also called ISIS) in Iraq and Syria, and the Houthis in Yemen all threaten Chinese
investments and key transit points along proposed trade routes.
One Belt, One Road could stretch Chinas foreign policy doctrines and capabilities to
a breaking point. Chinas rhetoric about winwin outcomes, consensus-driven
decision-making, and avoiding interference will bump up against the hard realities
of protecting Chinese citizens and investments. Chinas peacekeeping experience in
Sudan provides a preview of how the nation might pursue future intervention, if
required to protect its financial interests. Chinas desire to avoid intervention in
Sudan ran aground when the country began to break apart, threatening Chinas oil
investments and forcing Beijing to step in as diplomatic mediator and deploy
peacekeeping troops. If Chinese actions go beyond the basic protection of its
investments into broader geopolitical actions, international perception of Chinas
future foreign interventions could give credence to suspicions of Beijings
imperialistic desires. Such a dynamic has characterized Chinas relations in the East
and South China Seas in recent years; a westward corollary is not hard to imagine.
Translating the One Belt, One Road initiative from an ambitious cartographic
formulation with a historical hook into a workable strategy for economic diplomacy
and perhaps geopolitical influence will test Chinas capabilities across all aspects of
foreign policy. The march westward could be a long one indeed.