The ‘Unstringing’ of a ‘String of Pearls’ – Part One

Marcus is a second year student  reading International Relations and the East Asia regional editor for KCL International Relations Today.  Marcus currently serves on the committee of Kings College London Geopolitical Risk Society and writes for The Dialogue.

SIX PART SERIES: THE ‘UNSTRINGING’ OF A ‘STRING OF PEARLS’

A six-part sequel on China’s Belt Road Initiative (BRI) which aims to highlight various forms of challenges to China’s seemingly unopposed strategy of ‘stringing ‘pearls’. This series  looks into Chinese motivations in rejuvenating its historical Silk Road prowess and explores how other powerhouses have attempted to oppose such a projection of economic imperialism. In particular, this series  will engage with the strategies of Japan under the Abe administration, India under the Modi administration, ASEAN, European Union and, the US under both Obama and Trump administrations. Ultimately each segment is aimed at examining the institutional pushbacks to the BRI that unfortunately receive scant limelights in recent affairs.

PART ONE: STRING OF PEARLS

One Belt, One Road, One Strategy

The Belt Road Initiative (BRI) is a conglomerate of progressing economic development strategies in 2013 involving nearly 70 countries in Asia, Europe, Africa and the Middle East. Encompassing a global infrastructure network that consists of the Silk Road Economic Belt, the 21st Century Maritime Silk Road and the Ice Silk Road: China uses, acquires and builds railroads, ports and pipelines to challenge the centrality of maritime collectivity in the development of a future economy. 

Beijing’s multi-billion project, dubbed as “a new Marshall Plan with Chinese features” (Chen in Beeson, 2018: 241) is aimed at unifying global and domestic markets through cultural exchange and integration with attractive stimulus injections to foster global economic growth. On its surface, the BRI seems to embody the hues of Cosmopolitanism: by capitalising economic interdependence to foster trust and mutual understandings between states. Nonetheless, what lurks behind this initiative is Beijing’s agenda-driven political momentum to reshape a new economic world order or to some extent, a state-backed campaign for strategic influence and global dominance. 

The String of Pearls is a geopolitical theory coined by Booz A. Hamilton (2004) which hypothesises Chinese expansions of maritime presence through the construction and acquisition of naval infrastructures along the Indian Ocean periphery and beyond. ‘Pearls’ refer to the naval installations controlled by China’s presence i.e., infrastructural projects, port ownership, military bases, whereas ‘string’ refers to the connection routes between the adjacent ‘pearls’. Ultimately, through the personification of stringing the pearls together, the geopolitical theory stipulates the necessity for China to acquire and consolidate its command of the sea and hitherto, the sea lines of communication which have historically been synonymous to the prestige associated with global power.

With the aid of the ‘pearls’, the Maritime Silk Road allows China to link and integrate Southeast and South Asian maritime states with the African continent through an unhindered passage: allowing it to effectively hold maritime chokepoints i.e., the Strait of Mandeb, Strait of Malacca, Strait of Hormuz to leverage during periods of hostilities. With an integrated “network of ports, railways and roads, China will therefore be able to stabilise its position at the centre of economic activity across much of Asia” (Pitlo in Beeson, 2018: 249) through an unchallenged link between Europe and China through land and sea.

What’s in it for Beijing?

Contrary to common perception, maritime shipping is relatively cheaper than the economic costs of rail transportation; the BRI is said to cost around £760bn (Kuo and Kommenda, 2018). While China’s GDP size allows it the capacity to splurge on so called ‘white elephant’ projects, it would be naive to buy Beijing’s poster goals of solely facilitating global prosperity. Domestically, the BRI has produced an affluence of business opportunities for Chinese construction firms securing construction contracts worth more than $340bn. (Ibid.) Additionally, there is certainly the political aspect to consider: as Chinese firms are now engaging in global construction work at an unparalleled scale, so has the projection of Chinese economic power. The sheer positioning and usage of Chinese infrastructure and machinery around the world is testament to the formidable extension and projection of Chinese industrial might and capacity. Thus, it is imperative to look beyond the mono faceted display of Chinese desires to enhance its global status as there are certainly elements of financially-induced political leverage that is worthy of inspection. 

As suggested by Mark Beeson (2018), the BRI has immense symbolic and practical importance for Beijing: it caters to domestic economic consumption, does Beijing’s bidding for an enhancement of international image and more cautiously, it cements a permanent platform for Beijing’s eloquent instrumentalisation of checkbook diplomacy. Retrospectively, looking at Chinese strategic culture, the BRI serves as a reminder and revival of China’s glorious past, the ‘gatekeeper’ of the Silk Roads. The re-establishment of the fabled old trade routes are an important expression of China’s long-standing economic eminence in Asia and seem to suggest its intentions to expanding these boundaries beyond its traditional spheres of influence – China seeking to be a global power.

Nonetheless, while Beijing carefully curates a symbolic nature to the BRI, it is not the sole essence of its existence. There were extreme cases of China lending into very high-risk environments that seem to showcase that Beijing’s motivations supersede profit-making intentions as it becomes incompatible with fiscal rationality. The BRI acknowledges the ‘infrastructural gap’ between states and has promulgated the potential to accelerate economic growth in Asia-Pacific, Europe and Africa. What is worrisome is how China seeks to glorify the initiative as a “bid to enhance regional connectivity and [the] embrace [of] a greater future” (Xinhua, 2015): by stressing on the BRI’s potential constructive contributions to regional development, it has simultaneously reaffirmed China’s pivotal leading role.

Long to be perceived as Xi Jinping’s pet project, the BRI seeks to disrupt the “current institutional order that is entrenched by a form of American hegemony that works against Chinese interests” (Zhao in Beeson, 2018: 245). In 2014, Xi proposed the establishment of the AIIB and a Free Trade Area of the Asia Pacific to complement the ongoing BRI projects. China’s state-owned banks have already taken the initiative in financing the BRI – China Export-Import Bank had financed 2,057 projects in 49 nations (Jianshe in Aoyama, 2016, 14) and the China Development Bank has financed over 400 projects in 48 nations as of August 2015. Given the isolationist stance under the Trump administration, Beijing has filled the political vacuum as a golden opportunity to “exert a form of geoeconomic influence” (Blackwill and Harris in Beeson, 240) under its command. 

Debt Traps

As the political implications of BRI expand in scope, so do concerns arise of it being a form of debt-trap diplomacy that gives China too much leverage over smaller and poorer states. (Kuo and Kommenda, 2018) As not all states are financially adept at dealing with their debt obligations, China as a lender often extracts economic or political concessions from the debtor for purposes unrelated to the original loan. For example, allowing Beijing to have a sway in its foreign policy direction or even ownership of lands and ports that add finishing strokes to its ‘string of pearls’. Beijing’s instrumentalisation of economic realpolitik as such should not be foreign as it is simply a derivative of China’s unashamed use of checkbook diplomacy in dealing with Taiwan’s diplomatic recognition in Africa.

While some Chinese scholars (Li and Zheng, 2019) allege that the debt-trap narrative offers a double-standard prejudice towards China as such cases were evident in the experiences of underdeveloped states in the World Bank or IMF, China’s debt-for-equity deal with Sri Lanka is an alarming testament to this understatement. In 2017, Sri Lanka handed its control over the Magampura Mahinda Rajapaksa Harbour for a 99-year-lease. While the underused harbour had no strategic value to Sri Lanka but its strategic position (connecting the Straits of Malacca to the Indian Ocean) is paramount to China’s ‘string of pearls’. In less than a decade, China had effectively financed a port for Sri Lanka, and subsequently forced the latter to cough up ownership of the port for establishing a permanent presence in Sri Lanka.

Built on 660 acres of reclaimed land from the Indian Ocean, the Colombo International Financial City  is designed to be a metropolis doubling the size of Colombo that enjoys its own business-friendly tax regime and regulations and, “possibly a different legal system to the rest of Sri Lanka” (Safi, 2018). As funds for such a mega infrastructure project is predominantly financed by Beijing, it serves both Chinese business and political interests as well as a projection of Chinese power outside its domain. As poorer nations in Central Asia to Southeast Asia continue to sign up to vastly expensive schemes that offer poor value for domestic interests (Crabtree, 2019) and disregard the negative implications of unrestrained foreign investment, the problematique is whether more states will continue to pave into Sri Lanka’s footsteps. 

Should we be concerned?

Hidden behind the mirage of economic cooperation and interdependence lurks a masquerade of hidden pretences. Whether a win-win situation as Beijing reaffirms, the lack of transparency and predictability sends sinister signals across major powerhouses. While one would be wary of potential military threats of Chinese expansion, it would simply be too early to speculate on China’s conduct outside her traditional ‘sphere of influence’. Nonetheless, China’s expanding construction of ports in Pakistan, Sri Lanka, Bangladesh and Myanmar continue to be a cause for concerns for other peripheral powers as ports could be used as naval staging points around the Indian Ocean and the Arabian Sea. The establishment of China’s first overseas military base in Djibouti in mid-2017 had proven to provoke geopolitical tensions as it showcased resistance toward Chinese power projection capabilities in the Horn of Africa. 

Jonathan Hillman, the Director of Reconnecting Asia project at the Centre for Strategic and International Studies in Washington, argues that there are subliminal undertones to the “BRI being more than just roads, railways and other hard infrastructure […] it is also a vehicle for China to write new rules, establish institutions that reflect Chinese interests, and reshape soft infrastructure”. BRI, as seen through the lens of the recreation of America’s Marshall Plan, seems to reflect a desire to mimic and overtake American exceptionalism, taking the BRI as a stepping stone to re-establish a ‘new normal’ global order that gravitates around Chinese economic imperialism.

More crucially, Herbert Wiesner is weary of the exportation of China’s political model as countries begin to disregard established norms and order for “human rights [maybe] left in the ditches by the side of the New Silk Road”. States may opt to view China as the ‘model’ for political and economic development, taking their political institutions and culture as moulds. Should the BRI become a reality, it would quite literally cement China’s place at the centre of a regional network of production processes that will enhance China’s overall economic and geopolitical importance. (Beeson, 2018: 41)

While Third World Countries are not naive to see through Beijing’s playbook, the gaping need to secure long-term capital and investment explains why state leaders gladly express their desire to join a new institution under China’s flag that guarantees infrastructure-driven economic growth. (Firzli, 2015). Nonetheless, there is still relative institutional pushback from global powerhouses as China’s growing international economic presence has already generated a degree of resistance and concerns about neocolonialism. (Lumumba-Kasongo in Beeson, 2018: 250) As competition for regional supremacy continues to persist, so does resistance towards BRI – this is what the sequel will be looking into.

Bibliography

 “China unveils action plan on Belt and Road Initiative”. Gov.cn. Xinhua. 28 March 2015. Archived from the original on 17 April 2018. Retrieved 16 April 2018.

 3=World Pensions Council (WPC) Firzli, M. Nicolas J. (October 2015). “China’s Asian Infrastructure Bank and the ‘New Great Game'”. Analyse Financière. Archived from the original on 29 January 2016. Retrieved 5 February 2016.

https://www.theguardian.com/cities/ng-interactive/2018/jul/30/what-china-belt-road-initiative-silk-road-explainer

https://www.scmp.com/week-asia/geopolitics/article/3009731/next-hambantota-welcome-chinese-funded-us14-billion-port-city

https://www.chathamhouse.org/expert/comment/china-needs-make-belt-and-road-initiative-more-transparent-and-predictable

Beeson, M 2018, ‘Geoeconomics with Chinese Characteristics: the BRI and China’s Evolving Grand Strategy’, Economic and Political Studies, vol. 6, no. 3, pp. 240-256.

Aoyama, R 2016, ‘”One Belt, One Road”: China’s New Global Strategy’, Journal of Contemporary East Asia Studies, vol. 5, no. 2, pp. 3-22.

https://www.telegraph.co.uk/china-watch/business/belt-and-road-debt-trap/

Image credit: https://www.tradefinanceglobal.com/posts/guide-to-belt-and-road-initiative/

 

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