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  • Marina Barats

The Belt and Road Initiative: Chinese Expansionism, Debt Dependence and the Emergence of a New World Order?

This article was written by Marina Barats, Pinsker Centre Policy Fellow '22, and was originally published in International Relations Today.

Source: World Bank

Hillary Clinton once said that she did not “want her grandchildren to live in a world dominated by the Chinese [Communist Party]”. China’s rapid growth has increased the country’s economic and diplomatic influence. Beyond challenging American economic superiority, China’s expansion is a threat to the Western way of life and the liberal democratic system of governance encapsulated by the Washington Consensus. Key to securing a more favourable World Order for China are initiatives in developing counties, such as the Belt and Road Initiative (BRI). While having some developmental benefits, the BRI aims to expand Chinese geopolitical power and facilitate the export of the Chinese authoritarian system of governance to developing counties, coercing them into a new “Beijing Consensus”.

The BRI has been described as both “the Chinese Marshall Plan” and “Chinese neo-colonialism”. Unlike the Marshall Plan, the BRI provides loans at commercial interest rates for the development of infrastructure and energy projects, which often leave countries with unsustainable debt. If a country fails to service the loan, the project ownership passes to China. This is in sharp contrast with Western developmental programs which do not have a practice of seizing assets if developing countries fail to pay. 

The Hambantota International Port (HIP) in Sri Lanka is one example of the BRI’s extractive nature. Following Sri Lanka’s default on the loan, the country handed over 80% of the port’s ownership to the Chinese state-owned CMPort for a 99-year lease. The port’s location is favourable for business and strategically important for energy security due to its proximity to the Strait of Malacca and Suez Canal shipping routes, through which two-thirds of China’s oil imports pass. Significantly, China also builds BRI ports to be of dual commercial and military purposes. Indeed, men in Chinese military uniforms were spotted in Hambantota in the summer of 2021. Such developments confirm the “string of pearls” theory that China is building a network of military and commercial facilities to project its military power in the region.  

Through the BRI, China aims to secure its economy in case of sanctions or other disruptions. China is developing two crude oil pipelines in Kazakhstan and a Kazakhstan-China gas pipeline. The gas pipeline from Turkmenistan supplies over half of the natural gas imports to China, and this volume is expected to double. Ownership of these assets ensures a continuous supply of energy, diversifies sources of energy import and projects Chinese soft power.

Under the BRI, China has invested in 52 out of 54 countries on the African continent. Heavy investment in the mining, power and transport industries of a continent that struggles from a lack of infrastructure helps China win allies in international organisations especially as African nations account for a quarter of UN members. 

However, BRI promotes a dept-driven development model for African nations as they export raw materials and import Chinese manufactured goods with persistent trade deficit, thereby facilitating economic dependency and allowing China to exert political pressure on Africa. For instance, in the Democratic Republic of Congo, China controls over 70% of the country’s mining portfolio including the third-largest cobalt mine in the world. Cobalt is an essential resource for battery production, particularly for the strategically important electronics and electric vehicles industries. In exchange for mining rights, China builds infrastructure including roads and hospitals, but often these projects get delayed or are only partially delivered. Moreover, there is rarely any guarantee of the value the developing country will get in exchange for renting its primary source of wealth out to the Chinese. This has resulted in civil society unrest surrounding Chinese-linked deals. 

Relatedly, BRI deals suffer from a lack of transparency around lending conditions, with terms of the contract kept secret and hidden clauses included. Such furtive dealings differ wildly from American practices as US companies cannot have contracts with hidden clauses in extractive industries. Hence, China can provide more favourable funding conditions to states and projects that advance its strategic interests. Evidently, this is not conducive to democratic scrutiny and enables corruption.

As Chinese investment in Africa increases, the Chinese techno-authoritarianism is also being deployed on the continent. A notable example of this is the purchase of Huawei’s “Safe City”, a network of surveillance cameras that use facial recognition technology. This technology has been used to crackdown on dissidents. China also provides internet regulatory technology, which enables the monitoring and censorship of social media, thereby closing off an essential space for civil society. For example, in 2021, Nigeria shut down Twitter for 222 days. Although the technology in and of itself is not ‘repressive’, the fact that it is not embedded into any legal or governance framework due to extensive corruption and lack of democratic practices enables governments to infringe upon the rights and liberties of their citizens. As China continues to export its techno-authoritarian model to Africa, the prospect of expanding democracy on the continent seems increasingly gloomy. 

Given that Chinese infrastructure projects are subsidised by the state, it is difficult for market-oriented Western firms to compete. No Western country can afford a public investment abroad on the scale of BRI. Nevertheless, the West needs to step up its game and stand up to China’s desire to impose a new world order. The promotion of democratic values and practices in the developing world should continue to be a matter of uttermost importance for the West. Going forward the west should capitalise on ideas such as the D10, a group of leading democracies working together to address issues like 5G and the vulnerability of supply chains, to focus on building up their own investment in developing countries, whilst highlighting the costs to developing nations of pursuing closer ties with an authoritarian China.  

Marina Barats is a Policy Fellow of The Pinsker Centre, a campus-based think tank which facilitates discussion on global affairs and free speech. The views in this article are the author’s own.

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