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Economy

Myopia in the Belt and Road Initiative

Apr 17 , 2019

At Khorgos Gateway, the gantry cranes were buzzing overhead. As they hummed downwards, sturdy Kazakh workers attached drums of steel coils to their locomotives, swinging the bundles into freight wagons bound for Turkmenistan. Taking place against the spine of the Dzungarian Alatau mountains, the movement of commerce from the Chinese-Kazakhstan border across Central Asia is an image which holds perennial appeal to Western imaginations, pulled to the romanticized notion of the Silk Roads.

It was this vision of connectivity and cooperation across remote lands between Europe and China which Xi Jinping appealed to during the launch of China’s Belt and Road Initiative. Launched in 2013 and with a price tag estimated as high as $8 trillion, it has largely functioned to intensify China’s preexisting foreign policy objectives, located within a flexible framework whose rhetoric emphasizes connectivity, cooperation and multilateralism. As this century’s most ambitious soft power offensive, the BRI is split between the uneven development of the six land-based economic corridors which constitute the Silk Road Economic Belt (SREB) as well as the Maritime Silk Road, which functions as the oceanic complement to China’s terrestrial BRI efforts. This is gradually giving rise to a synergistic web of pipelines, ports, parks, roads and railways diffused around the Afro-Eurasia region.

Khorgos Gateway functions as a leading entry point for the China-Central Asia-West Asia corridor and acts as the Western media’s figurehead for this initiative. Xi Jinping’s speech launching the SREB in 2013 stressed the importance of Kazakhstan and China in ‘[building] a new Silk Road’. The New Silk Road Project, a student led research project supported by Jeep, the University of Saint Andrews and the Center for Strategic and International Studies, sought to understand whether China’s BRI investment was actually supporting Xi Jinping’s vision to, ‘open up the transportation channel from the Pacific to the Baltic Sea’ as a conduit for transcontinental overland trade. The New Silk Road Project aimed to achieve this by documenting the emerging transportation hubs across Europe and Asia through interviews with key actors and academics.

Despite the stated Chinese goal of investing in transportation infrastructure to link Eurasia, there was a surprising lack of Chinese investment in transportation infrastructure in Turkey, the South Caucasus and Central Asia. In Western Kazakhstan, where the need for improved road and rail links is particularly acute, the Makat-Aktobe road is being reconstructed. Counter to expectation however, the effort is funded not by Chinese state lenders but by the Asia Development Bank. This minimal involvement was likewise seen on the Caspian Sea littoral. Here, the Kazakh Port of Baku and Azerbaijan’s Port of Aqtau have seen negligible increases in Chinese trade using these established routes. This absence of investment is particularly pronounced when compared to China’s investment in other corridors such as the China-Pakistan Economic Corridor (CPEC), currently valued at over $60 billion, and the China-Indochina Economic Corridor through Southeast Asia.

Confusingly, some of the large-scale infrastructure projects which are being implemented in Turkey and the South Caucasus region are branded by government officials as part of the BRI. This is without financing or implementation from China’s policy banks and state-owned enterprises. Together these help to function as effective indicators as to whether these projects are more than just speciously connected to the endeavor in the absence of Chinese forthrightness. For example, the recently completed Kars-Tbilisi-Baku line and the ongoing construction of the Ankara-Sivas line in Turkey are two projects which have been marketed in this way. This points towards these countries’ skillful leverage of the nebulous aims and broad rhetorical vision of the BRI to forward their own regional agendas rather than the BRI’s own priorities.

Over five years since the launch of the initiative, the reduction in Chinese subsidies for freight moving on EU-China trains serves to emphasize the secondary nature of these transcontinental connections to the BRI. While the signing of the first twelve-month contracts successfully fixed subsidy rates in 2018, resulting in a record 6,300 cargo trains sent to Europe the same year, this success is reliant on China’s local government subsidies. These subsidies might be discontinued in 2020, nearly thirty years before the estimated completion of this initiative. This represents an intrinsic threat to these lines’ high growth rates and even their future viability. Despite this, these lines have attracted a disproportionate level of media attention in international media outlets resulting in the BRI becoming more closely associated with the rebuilding of the Silk Roads than is accurate.

Schematic maps illustrating the BRI are a vital tool in providing the public with a representative picture of the most important development strategy of this century. It is becoming clear that EU-China railways and investment in transportation channels to Europe are only a slim part in the implementation of this initiative. Current schematic maps – which often use broad sweeping lines between China and Europe to emphasize transcontinental connectivity, bidirectional movement and evenly dispersed development – are therefore inaccurate on multiple levels. This inaccuracy does great disservice to policy makers and public perceptions of the initiative.

Schematic maps should instead focus on the actual implementation of infrastructure projects. So far, this has been characterized by a regional focus around Pakistan, Southeast Asia and East Africa. Here, China is financing Gwadar Port, planning the Kunming-Singapore railway and building the Nairobi-Mombassa high speed railway. Focusing on these more geographically constrained economic corridors makes much more sense given China’s preexisting hard-foreign-policy objectives in these regions. For example, in Pakistan the BRI provides a justification for intensifying its Indian containment strategy. In Southeast Asia, the BRI helps China to secure further influence in Southeast Asia and ensure control over the South China Sea. Finally, China’s ongoing industrial capacity cooperation in East Africa helps it climb the global value chains by exporting antiquated industries abroad.

While these objectives are not singular, their importance to China’s security and development provide a compelling rationale as to why China has chosen to focus investment here as opposed to other regions. It would be myopic to believe that as China’s domestic economy continues to struggle, it will prioritize investment in a quixotic vision underpinned by little economic or strategic purpose. We need to separate the regional priorities from possible long-term international implications of China’s BRI and build maps which start to reflect this reality.

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