China's Belt and Road Initiative

Strategic and Economic Impacts on Central Asia, Southeast Asia, and Central Eastern Europe

Alfred Gerstl, Ute Wallenböck, Alfred Gerstl, Ute Wallenböck

• Publisher: Routledge
• Year: 2020
• eBook ISBN: 9781000260656
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Arms Control
• Index: Politics & International Relations

This edited volume presents a trans-disciplinary and multifaceted assessment of the strategic and economic impacts of China's Belt and Road Initiative (BRI) on three regions, namely Central Asia, Southeast Asia, and Central Eastern Europe.

The contributions to this book demonstrate the requirement of a more realistic view concerning the anticipated economic benefits of the New Silk Road. The contributors critique the strategic effects of China's opaque long-term grand strategy on the regional and global political order. Specific countries that are covered are Finland, Hungary, Kazakhstan, Malaysia, Poland, and Thailand. Additionally, case studies from South Asia and Africa, notably India and Ethiopia, enable insightful comparisons.

Encouraging readers to critically challenge mainstream interpretations of the aims and impacts of the BRI, this book should interest academics and students from various disciplines including Political Science, International Relations, Political Geography, Sociology, Economics, International Development, and Chinese Studies.

1Making analytic sense of the Belt and Road Initiative

A plea for multi- and trans-disciplinary approaches and eclecticism

Alfred Gerstl and Ute Wallenböck

The BRI basket: policies and tools

The 50 children, aged 8 to 12 years, who attended an educational but also playful class on the ancient Silk Roads at Palacký University’s Children’s University in Olomouc, the Czech Republic, in February 2020 were fascinated. The children were stunned to get insights in Marco Polo’s legendary journey as well as the life and interactions of different ethnic groups, various cultures and religions, and the century-long exchange processes along the ancient Silk Roads. The term die Seidenstraße (the ‘Silk Road’) was coined by German geographer Ferdinand von Richthofen in the 19th century. The historical Silk Road was not a single road but a network of routes that originated due to silk trade and the transfer of other products, many of them unknown in Europe in the Middle Ages (Wallenböck 2019). Therefore, we use the term ancient Silk Roads (in the plural). “Traveling” in small groups between five destinations representing, inter alia, a Chinese tea shop, a workshop for silk painting, and a traditional market in Central Asia, the children at the Children’s University received at each destination a stamp for their travel permits. The aim was to demonstrate the young students that a few centuries ago the journey was not only hindered by high mountains and dangerous deserts, but also by administrative restrictions made by political leaders. This knowledge about the obstacles and how they needed to be overcome may have added further to the children’s fascination. However, not only children, also many adults believe in a positive, highly romanticized narrative of the ancient Silk Roads. No wonder that the New Silk Road builds on this powerful friendly image of peaceful trans-continental exchange (Chong 2020; Frankopan 2015, 2018).

Indeed, the ancient and the New Silk Road(s) have certain objectives and features in common – at least at the first view. Both are vast transport corridors, enabling the exchange of goods, ideas, and people between Asia and Europe. However, there exist also significant differences. First, unlike its historic predecessor, the Belt and Road Initiative (BRI) is a deliberate political project. Even though it largely builds on existing transport corridors and regional infrastructure schemes, being a more than USD 1 billion large project, it dwarfs all other regional connectivity initiatives in Asia and Europe. Secondly, as the BRI is a Chinese brainchild, the People’s Republic of China (PRC) is logically placed at the center-stage: all roads lead to China. Thirdly, concerning its geographic scope the New Silk Road is much more ambitious than the ancient one. It spans from China to Southeast, Central, and South Asia, further to the Middle East, East Africa, and Europe. Due to the maritime component, Oceania and the Antarctic (the so-called Arctic or Polar Silk Road) are already formally included, and Latin America and the Caribbean will likely join the initiative, making it a truly global endeavor (see Map 1.1).

The ambitious BRI was first proclaimed by Chinese President Xi Jinping in Astana (now Nur-Sultan) in Kazakhstan in September 2013, where he presented his plans for the land-based Silk Road, the so-called Silk Road Economic Belt (SREB). One month later, in a speech in Indonesia’s capital Jakarta he laid out the second component of his initiative: the 21st-century Maritime Silk Road (MSR). The main objective of the New Silk Road is to modernize the broadly defined infrastructure, including roads, railways, airports, ports, pipelines, and telecommunication networks, in China and the neighboring regions, to better connect these parts of the world with each other. Thus, by virtue of the BRI China shall become better connected by land and sea with its close neighbors, but also geographically more distanced nations in Northeast, Southeast, South, and Central Asia, the Middle East, East Africa, and Europe.

Overall, in improving trans-regional connectivity and interlinking existing transport corridors in Asia, the BRI facilitates a trans-continental exchange of goods, services, ideas, and people. While this dimension can be per se regarded as positive, there is also a negative side. Better trans-border connectivity also nolens volens contributes to the spread of transnational criminal networks, notably people, weapons, and drug smuggling, and of diseases and pandemics, such as currently the coronavirus (Covid-19) which originated in China’s Hubei province. Cross-border exchange, facilitated by the ancient Silk Roads, was already a decisive factor for the distribution of the plague from Asia to Europe in the Middle Ages (Frankopan 2015: 63). As of June 2020, we witness the extreme paradox that in our globalized and, especially in Europe, borderless times in order to fight the further spread of the coronavirus many nations around the globe shut their borders and severely restricted the movements of their own citizens within their territory. Even in the Schengen Area not all borders were open to all European travelers by the end of June 2020.

Despite the international criticism on China’s failure to contain the virus in early 2020, as of June 2020, Beijing could change its negative image to the positive, at least in certain countries. President Xi emphasizes the “Health Silk Road” component as part of the BRI, already mentioned in 2015 (Kuo 2020). In fact, the PRC provided urgently needed medical goods to various nations, demonstrating its solidarity with affected societies. (Immediately after the Covid-19 outbreak it was China which received those goods from up to 80 nations and various international organizations.) This manifestation of medical diplomacy, though, has been criticized by the European Union (EU) and the United States (Myers and Rubin 2020). So far, apart from Italy, Serbia especially benefited from China’s support – a nation that is already a key beneficiary of Chinese BRI investments in Central Eastern and Southeastern Europe. However, criticism on the quality of the face masks donated by Beijing has been raised in various countries.

All in all, according to official Chinese sources, the BRI shall create trust among the participant countries, enabling to subsequently deepen cooperation in trade, finance, economics, and people-to-people connectivity. The latter is a crucial dimension of the BRI, both a means and aim of the initiative (State Council of the PRC 2015). Chinese officials like to present the New Silk Road as a win-win cooperation. They highlight the public goods Beijing provides the international community and, being a developing nation itself, that it strengthens the influence of the Global South in the international system (Sheng 2018; State Council of the PRC 2015). Although the majority view is that the post-1945 international order favors the Western nations, so far due to a lack of consensus plans for reforms, for instance, of the United Nations or the Bretton Woods Institutions, have not gone far. The BRI may become a catalyst for reforming global (financial) governance. However, rather than imposing a system primarily based on Chinese interests and power, a consensus of the industrialized and developing nations is required to develop a more just and inclusive order (Gerstl 2020: 135).

Outside China both the geographic scope and the opaque aims of the BRI raise doubts, if not concerns about Beijing’s strategic motives behind the New Silk Road. Often mentioned realpolitik objectives behind the BRI are: getting better access to natural resources in foreign countries, but also to export China’s excess production, notably steel, cement, and aluminum, as well as more sophisticated products to the Western markets. Another fact is that in many countries Chinese laborers rather than the local workforce are building the roads, railways, and bridges, thus reducing the unemployment rate in China itself. Almost 90 percent of the China-funded BRI projects are carried out by Chinese contractors (Frankopan 2018: 120).

Even though the literature on the BRI will further grow significantly, it is unlikely that a consensus will emerge about the exact motives behind the New Silk Road. Rather, it will remain highly contested in politics and academia whether the BRI is building on a comprehensive strategic masterplan or even a grand strategy to become the dominant political and/or economic power along the New Silk Road, aiming at changing the existing regional and international order (Gong 2019; Jones and Zeng 2019; Zeng 2019; Beeson 2018; Ploberger 2017; Rolland 2017; Pu 2016; Fallon 2015). This question is one of the red threads of this volume; Struye de Swielande and Orinx as well as Liu address it explicitly in Chapters 7 and 8, respectively.

According to our viewpoint, the BRI resembles a big basket in which an ever-increasing amount of China’s domestic, economic, and not least strategic interests, policies, and implementation tools have been put – and which are utilized by various Chinese actors at the state and provincial level to promote their interests. This assessment, though, does not rule out the possibility that the Chinese government might develop a comprehensive BRI strategy in the future. The many different perceptions and interpretations of the New Silk Road demonstrate that the BRI is very much what an observer wants to see – or, to be more precise, how he or she perceives China, its astonishing economic and military rise in general, and its aims in the international arena.

Accordingly, contradictious views on the BRI are widespread. In many countries we notice among ordinary citizens the phenomenon of Sinophobia, while at the same time groups of citizens, usually the elites and business circles, share a positive view on China. In regard to Central Asia, Sébastien Peyrouse (2016: 22) observes: “Sinophilia and Sinophobia go hand-in-hand (…). Both can be present in the same person depending on the angle of view or the question being addressed”. Among the contributing factors to Sinophobia in Central Asia are the perceptions of China’s debt-trap diplomacy, unfulfilled promises, (domestic) corruption, and the harsh treatment of the Muslim Uighur minority in Xinjiang (Kruglov 2019).

We may generalize that some neighboring nations use Sinophobe sentiments to distance themselves from China, as a kind of “intersection between hatred and fear” (Billé 2015: 10; emphasis in original). In regard to Mongolia, Franck Billé (2015) investigates the connection of Sinophobia with Mongolia’s desire to distance itself from China and from Asia. He claims these sentiments to be embedded rather in historical than in current economic or political factors. Similar findings in regard to Central Asia are presented by Cathrine Owen (2017). She traces back the Sino-Russia tension around territorial claims in this region to the interactions between the Qing and Russian Empires in the 19th and 20th centuries. She further claims that, to date, Sinophobia manifests itself in the conspiracy theories of Chinese intentions in Central Asia. At the same time, Peyrouse summarizes as the main result from surveys on China conducted in Central Asia that “China remains a challenge for Central Asia” (Peyrouse 2016: 18; emphasis in original). Negative perceptions of the population on China may impact on the relations with Beijing – Sinophobia can be regarded “as one of the major stumbling blocks for [the] BRI” (Vakulchuk and Overland 2019: 118). However, the phenomenon of Sinophobia is not restricted to Central Asia, but can also be witnessed in Southeast Asia, for instance, in the Philippines and Myanmar. The perceived rising influx of Chinese workers seems to be a significant catalyst for anti-Chinese feelings for which Malaysia is another example (Kyaw 2020).

Initially, most citizens outside the PRC had a comparatively favorable view on China and the BRI, but in general it has turned recently more skeptical or even negative. The American Pew Research Center conducts annual opinion polls on the perception of China, the latest one in 2019. Striking are the regional differences. In Western Europe, China’s image further suffered in 2019 (median: 57 percent an unfavorable, 37 percent a favorable perception). In Central Eastern Europe, China has in general a positive image (36 unfavorable: 43 percent favorable), exceptions are Slovakia (40:48) and the Czech Republic (27:57). In East Asia, the negative perceptions are very strong, with Japan (85:14) and Indonesia (36:36) representing the extreme poles. Reasons for the increasingly unfavorable views are China’s rising influence in economics and world politics and its military power (Silver, Devlin, and Huang 2019).

One of the most prominent criticisms on the BRI concerns the financing of the projects. Notably, developing nations lack alternatives for funding and thus must rely on China. This raises fears of a deliberate Chinese debt-trap diplomacy. The most cited examples are the harbors of Hambantota (Sri Lanka) and Piraeus (Greece) as well as the Bar-Boljare highway project in Montenegro. The Chinese Export-Import Bank (Exim) granted the small Balkan nation a loan which covers 85 percent of the building costs. The highway is built by a Chinese consortium, employing 3000 Chinese laborers. However, there are doubts about economic feasibility and whether the project can be realized at all. In addition, due to the intransparency of the agreement with Beijing, there are wild speculations about possible leasing options for China if Montenegro cannot repay the loans (Jeska 2020). This example provides an illustration for Jeremy Garlick’s (2020: 2) claim that it is impossible to separate the economic dimension of the BRI from its political and strategic logic.

Yet, whether the BRI is regarded as an altruistic Chinese initiative to globally promote wealth or a tool to impose Chinese dominance on other regions, foreign countries and companies can benefit economically from the New Silk Road. For this, however, the specific BRI projects need to be financially, socially, and environmentally sound and sustainable. To prevent negative repercussions, they should undergo before their start a thorough Environmental and Social Impact Assessment (ESIA) (Russel and Berger 2019: 13). Moreover, the national political, economic, and legal systems of the BRI participants must guarantee an efficient and corruption-free implementation of the projects. In other words, if handled appropriately, the BRI offers the partners a broad set of economic opportunities.

Whether the New Silk Road follows a masterplan or not, the BRI already impacts economically and increasingly strategically on many regions and countries, be they participants or by-standers of the initiative. The main non-participantis the United States. Japan has not joined the initiative either but agreed to selectively cooperate with China in joint infrastructure development in Asia (Armstrong 2018). Both Washington and Tokyo, however, promote their own, albeit much smaller connectivity initiatives in Asia. They also pursue a Free and Open Indo-Pacific Strategy, emphasizing multilateralism and upholding a rules-based international order (United States Department of State 2019; Ministry of Foreign Affairs of Japan 2018). Even though India collaborates with China in infrastructure development, it is also highly critical of perceived negative Chinese aims behind the BRI. Especially worrisome for New Delhi are Beijing’s string of pearls, i.e., a series of ports in Southeast and South Asian countries leased by China, and the close cooperation of China with Sri Lanka and Pakistan (Hoering 2019: 114–117). The Sino-Pakistani collaboration is especially close, the China-Pakistan Economic Corridor (CPEC), including the port of Gwadar project, being the most prominent and controversial example. According to Siegfried O. Wolf (2020), “CPEC consists of a program to promote economic performance, but also serves as a tool for Beijing to extend its strategic influence from the South China Sea to the Indian Ocean and the Arabian Sea”. To demonstrate India’s dissatisfaction with the BRI, Prime Minister Modi refused to participate in the two Belt and Road Forums in Beijing in 2017 and 2019, respectively. India’s diplomacy, though, was successful in removing the Ban...

Table of contents

• Cover
• Half Title
• Series Information
• Title Page
• Copyright Page
• Contents
• List of illustrations
• List of contributors
• List of abbreviations
• 1 Making analytic sense of the Belt and Road Initiative: A plea for multi- and trans-disciplinary approaches and eclecticism
• 2 The Belt and Road Initiative post-April 2019: Plus ça change!
• 3 Thoughts on appropriate approaches to studying BRI’s actual impacts and limits
• 4 The Chinese Belt and Road Initiative and its impact on democratization and de-democratization processes
• 5 China’s faltering normative power drive in Kazakhstan
• 6 Malaysia and China’s Belt and Road Initiative: A Trilogy of Commitment Problem, Diplomacy, and Strategic Foreign Policy
• 7 Chinese grand strategy and the Belt and Road Initiative: The case of Southeast Asia
• 8 The BRI, logistics, and global infrastructure: New world order, the game of Go, and the disposition of Shi
• 9 China and the USA in Central Asia: Competing actors with different goals?
• 10 Rail development potential in Asia in the frame of the Belt and Road Initiative: What market?
• 11 From railway dreams to a reality check: Achievements and challenges of Sino-Polish relations at the local level – the case of Łódzkie-Sichuan partnership
• 12 Economic (policy) implications of the Belt and Road Initiative for Central, East, and Southeast Europe
• Index