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12 December 2018

For China: One Belt, One Road, No Plan?

By Ian Morris

China's Belt and Road Initiative is one of the biggest geoeconomic developments of the 21st century. On that point, there is agreement. On the question of Beijing's strategic motives, speculation abounds.

China's economic rise has come within American-dominated institutions and markets. Chinese President Xi Jinping wants to break out of this system.

Since the 15th century, the West has ruled the waves and thus dominated the globe. The Belt and Road Initiative is China's attempt to access to the oceans by building roads and harbors across Central and South Asia.

On Sept. 7, 2013, in a speech at Nazarbayev University in Astana, Kazakhstan, Chinese President Xi Jinping announced the launch of the One Belt One Road initiative, now widely referred to as the Belt and Road Initiative. This massive connectivity project, Xi said, would revive for the 21st century the ancient Silk Roads linking China to the wider world. Slightly confusingly, the "One Belt" in the name refers to the creation of new overland links, along the path that the original Silk Roads took through Central Asia to the Roman Empire, while "One Road" refers to maritime links across the South China Sea and the Indian Ocean. But the important point is that the initiative will commit a staggering $4-8 trillion (depending on how broadly the project is defined) to fill Asia's infrastructure gap.

The infrastructure gap is real enough. I saw this for myself this summer on a visit to Nepal, where, once the monsoon starts, few roads outside the capital Kathmandu are passable unless your car has four-wheel drive. The Asian Development Bank has calculated that Central Asian governments need to spend at least $33 billion each year between now and 2030 just to keep pace with the demands being put on their transport and communication networks. With low commodity prices and rising populations driving up their budget deficits, it was not clear — until Xi's speech at Astana — where that cash would come from. Just a month after his speech, Xi put flesh on the bones of the initiative by announcing the creation of the Asian Infrastructure Investment Bank with $100 billion of start-up capital (roughly two-thirds of the World Bank's funds). A year after that, a separate Silk Road Fund followed, with a further $40 billion to invest.

Few dispute that this is one of the biggest geoeconomic developments of the early 21st century, but there is less agreement on what it means. China's state-run Xinhua News Agency calls the Belt and Road Initiative "a bid to enhance regional connectivity and embrace a brighter future," and points to the hundreds of thousands of jobs it has already created outside China. Critics from Malaysia and India to the United States, however, have seen in it everything from neocolonialism and debt bondage to a cunning way to bring the ethnic minorities in China's western provinces under tighter control.

Just how heated the arguments can be was on display at a conference I recently attended in Astana, where Xi initially rolled out the initiative five years ago. Johannes Linn, a senior fellow of the Brookings Institution in Washington, began by observing (very reasonably) that the initiative is really no more neocolonialist than virtually any other foreign direct investment project of the past 70 years. But when Robert Kaplan, formerly Stratfor's chief geopolitical analyst, speculated about China's possible strategic motives in pushing the initiative, Pakistan's former Prime Minister Shaukat Aziz launched into him, accusing Kaplan of being a lackey of the U.S. State Department. Other speakers, both on the panel and from the floor, rushed to back Aziz. The initiative, Yan Xuetong of China's Tsinghua University insisted, is not a strategy but an invitation, an attempt to solve problems and to spread wealth, with no deeper thinking behind it. One belt, one road, but apparently no plan.
The Ocean Path to Economic Growth

That an initiative expected to cost $4-8 trillion — equivalent to 5-10 percent of global GDP at nominal exchange rates — would not be part of some larger plan beggars belief. But if China's leaders are not trying either to create debt slaves or just to be nice to their neighbors, what do they want? Looking at the map, it is hard not to see a plan of quite breathtaking ambition, aiming at nothing less than remaking Eurasian geography in a form that suits China.

Looking at the map, it is hard not to see a plan of quite breathtaking ambition, aiming at nothing less than remaking Eurasian geography in a form that suits China.

This is not the first time China has done such a thing. Two thousand years ago, the Roman and Han Chinese empires were roughly the same size (about 5 million square kilometers) and had similar populations (about 60 million), but the Roman economy was probably 50 percent bigger than the Chinese. The main cause seems to have been Rome's conquest of all the shores surrounding the Mediterranean Sea. In an age when moving goods by sea was orders of magnitude cheaper than moving them overland — it cost roughly the same to ship a ton of grain 2,500 kilometers (1,550 miles) from Alexandria in Egypt to Rome's port at Ostia as it did to load it onto donkeys and carry it the last 30 kilometers (18.6 miles) from Ostia to Rome itself — this allowed the empire to turn the Mediterranean into a superhighway. Commodities, troops, taxes and migrants washed rapidly from one end of the Mediterranean to the other, generating so much wealth that the city of Rome — where elites spent massive amounts of their gains — grew to a million inhabitants. According to newly published high-resolution ice core data from Greenland, Roman mining was on such a scale by the first century A.D. that the lead pollution it generated would not be equaled until the eve of the Industrial Revolution. Beginning in the third century A.D., though, Rome's ability to control the entire Mediterranean Basin fragmented, and in the fifth century, the economy that a united Mediterranean had made possible collapsed.

Earlier empires had used great rivers such as the Tigris, Euphrates and Nile for transport and communication in much the same way as Rome would use the Mediterranean, but none of these channels could begin to match the economic potential of an entire sea. Similarly, while China's Han Empire, roughly contemporary with Rome's, made plenty of use of the Yellow and Yangtze rivers, its lack of an equivalent of the Mediterranean saddled it with much higher transport and communication costs than Rome faced.

Not until the year 600 did Chinese emperors figure out a solution: They would create an artificial equivalent to the Mediterranean, digging the 2,000-kilometer-long, 40-meter-wide Grand Canal, a chain of waterways linking the Yellow River to the Yangtze. It was still nowhere near as good as an actual sea, but as migrants and capital moved south along it and rice moved north, the economy boomed. The canals — arguably the biggest infrastructure project in the premodern world — "provided endless benefits to the people," as one seventh-century scholar put it; "The benefits they provide are enormous indeed!" By 700 the city of Chang'an was as big as Rome at its peak, and for the next four centuries, China was the world's economic powerhouse.

However, although no one ever recreated a unified Mediterranean, from the 15th century onward, Western Europeans did something even better. Exploiting new kinds of ships and guns (both of which had initially been pioneered in China), they tied the Atlantic, Indian and eventually Pacific oceans together into a single system. Ruling the waves gave them dominion over the earth as well, bringing down the indigenous empires of the Americas in the 16th century, those of India in the 18th and China's in the 19th. By then, the West bestrode the world like a colossus.
Outflanking the American Position

The geostrategic situation that the People's Republic of China inherited in 1949 was basically the legacy of this post-15th-century revolution. Only economies able to access the world's oceans could hope to grow rapidly, and that access was firmly in American hands. A chain of American allies, from Japan and South Korea through Taiwan and the Philippines to Singapore, lay between China and the open seas.

Mao Zedong responded by turning inward, developing China from its own resources; the results were famine and stagnation. Faced by the prospect of even worse catastrophes, Mao's successors accepted that their only option was to seek access to the world's waterways, although this could only be on American terms. The result was an economic miracle, lifting a half-billion Chinese out of extreme poverty — but all this was done on American sufferance, within American-dominated institutions and markets.

Xi Jinping is now attempting to break out of this system. He is pursuing two lines of attack. One is a frontal assault on what Chinese strategists call "the First Island Chain" dominating its coasts, by building military bases in the South China Sea and attempting to bully or bribe America's allies into leaving the Western orbit. The second line of attack — the Belt and Road Initiative — is more subtle; in a 21st-century version of the Grand Canal, Xi is outflanking the American position, building a network of roads and harbors that will give China unimpeded access to the oceans. Migrants and capital will flow out from China; raw materials will flow in. All being well, China's poor, backward western provinces will enjoy an economic boom just as spectacular as the one its eastern provinces enjoyed after Mao's death, and China's "peaceful rise" will be complete.

In a 21st-century version of China's Grand Canal, Xi is outflanking the American position, building a network of roads and harbors that will give China unimpeded access to the oceans.

Back in the 19th century, while the Western powers were still building the modern world economy, they too embarked on massive infrastructure projects to reshape geography to their advantage. The Suez and Panama canals and the American transcontinental railroad immediately spring to mind. China's 21st-century version, however, has little in common with old-style colonialism's crude and violent land grabs. If we want a historical analogy for the Belt and Road Initiative, we should perhaps look instead to the Marshall Plan that the United States launched in the late 1940s, which poured $12 billion of the United States' own money — 1 percent of its GDP — into rebuilding Europe's shattered economies.

Like the Marshall Plan, the Belt and Road Initiative is almost as much about diplomacy and soft power as about infrastructure. The historian Victoria de Grazia aptly called her book about the postwar Atlantic world Irresistible Empire; in the most enlightened piece of self-interest on record, the United States not only helped make Europeans rich enough to buy American imports but also made them want to be part of a new, American-dominated order.

The Belt and Road Initiative has strikingly similar aims. The "Spirit of the Silk Road," the Xinhua News Agency tells us, is about "solidarity and mutual trust, equality and mutual benefit, inclusiveness, a disposition to learn from each other, and cooperation in finding win-win solutions." And if what Pakistan's former prime minister said in Astana last month is any guide, it is working.

A Coalition of Authoritarian Regimes

Some analysts like to discuss the Belt and Road Initiative in the same terms as the "Great Game," Rudyard Kipling's name for the diplomatic and military maneuvers for influence in Central Asia between 19th-century Britain and Russia. There are ways in which the analogy can be useful, but the big difference between the two cases is that the Great Game that China has been playing in the 2010s has been a form of solitaire. Other than its embattled armies in Afghanistan, the United States has been conspicuous only for its absence from most of the region.

But that, as the strategist Edward Luttwak reminded us in Astana, does not have to continue. The traditional strategic recourse of a maritime power like the United States to threats from a land power like China, Luttwak observed, is to stir up trouble in the land power's rear. If the Belt and Road Initiative really does start outflanking the First Island Chain, the United States always has the option of launching its own diplomatic and economic offensive in and around Kazakhstan to compete with Chinese blandishments.

Yet is this something that Americans should want to do? The Belt and Road Initiative is popular in much of Central and South Asia. It is no more of a threat to its recipients' sovereignty than other foreign direct investment schemes, and it may well raise GDP for all the countries involved. Seen in one light, American interference is surely no more to be desired than was Soviet resistance to the Marshall Plan, and bullying Central Asians into rejecting Chinese finance might be just as counterproductive as Stalin's insistence that Eastern European governments join the Comecon organization in 1949.

Seen in another light, though, it might be the height of folly to make a moral equivalence (as opposed to a strategic one) between the Marshall Plan and the Belt and Road Initiative. The Marshall Plan was designed to make the United States and its allies richer and safer by creating a coalition of free democracies, united by their shared commitment to openness and shared opposition to violent Soviet expansion. The Belt and Road Initiative, by contrast, seems designed to make China and its allies richer and safer by creating a coalition of authoritarian regimes, united by their shared commitment to power and shared opposition to democracy.

One belt, one road, one very alarming plan.

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