Illustration on China’s OBER projects by Alexander Hunter/The Washington Times more >
More than to enhance trade, China would use the port network to dominate Eurasia
By Dan Negrea - - Monday, September 11, 2017
“President Xi Jinping’s proposal of ‘One Belt, One Road’ is the most significant and far-reaching initiative that China has ever put forward,” wrote influential Chinese Ambassador Wu Jianmin in a 2015 China-U.S. Focus article. Despite official efforts to present OBOR as just an Eurasian economic development initiative, it is a steppingstone to making China a global power. The United States should offer a revived Trans-Pacific Partnership as a superior alternative for Asia’s development.
OBOR is a network of highways and railways along the ancient Silk Road that connected China, Central Asia, the Middle East and Europe. The road is a network of ports along a maritime route that connects China to Europe via the South China Sea, the Indian Ocean and the Mediterranean. OBOR promotes development through increased economic relations among 65 countries with 4.4 billion people. Since its launch in 2013, OBOR has been associated with railway construction in Laos, Kenya and Ethiopia, and port expansion in Pakistan and Greece. HSBC, a top Asia bank, estimates that OBOR will require investments of about $5 trillion over the next 15 years.
🔴 It is a poorly kept secret that China’s real aim with OBOR is to build and dominate an Eurasian bloc of countries to challenge America’s Atlantic bloc. China’s bloc will not be a haven of freedom and benevolent foreign relations. China does not require democracy and economic transparency from its members, just order and stability to achieve development. And Chinaremains heavy-handed in pursuing its interests. It has used its military power to intimidate maritime neighbors and its economic power for reprisals: Just this year, China announced economic sanctions against South Korea for installing defensive THAAD missiles, and it threatened to boycott Cambridge University Press if it publishes articles critical of China. In China’s hierarchy of values, the right to develop far outranks the right to freedom.
China has been guided since the 1980s by Deng Xiaoping’s dictum “Hide your strength, bide your time, never take the lead.” This changed in 2012 when, shortly after becoming Communist Party leader, Xi Jinping called for “striving for achievement” toward the “Chinese Dream” of “the great rejuvenation of the Chinese nation.” The ultimate Chinese dream is to reclaim its historic place as the Middle Kingdom, the dominant power in Asia, and from there to dominate Eurasia. OBOR’s aim is to achieve China’s dream and overcome its nightmare.
China’s strategic nightmare is that the sea lanes to its Eastern ports can be closed in a military conflict. Chinadepends on the sea for most of its exports and imports. Significantly, it imports over half of its oil and 80 percent of it comes by sea. Its sea lanes are patrolled everywhere by the U.S. Navy and, closer to home, by its competitors, India and Japan.
China views OBOR as a partial solution by opening a Western land route to import oil from the Middle East and Central Asia, and to export its goods to Eurasia. But OBOR clashes in Central Asia with India’s ambitions there and with Russia’s desperate efforts to remain relevant in these former Soviet Union republics.
China’s economic nightmare is that stalled economic growth results in social unrest, a weak central government, and another “century of humiliation” by foreign powers. China has a dynamic economy but is still a developing country: According to the International Monetary Fund, China’s 2017 gross domestic product per capita will be just $8,500. This compares with about $30,000 for South Korea, about $40,000 for Japan and Germany, and almost $60,000 for the U.S.
To stay in power, China’s Communist Party must continue to deliver each year more than 10 million new jobs. But it is getting harder. China’s growth has been largely driven by huge investments in roads, housing and heavy industry. With fewer profitable domestic investments available and lots of overcapacity, Chinais at a crossroads. Closing factories and firing workers may cause unrest. Growing consumer demand by increasing wages may make Chinese exports uncompetitive. OBOR’s infrastructure projects promise reduced overcapacity, increased exports and more jobs.
Except that OBOR countries have their own workers who need jobs and would not welcome tens of thousands of Chinese workers for extended stays. Furthermore, Chinese products are not necessarily the best for these projects.
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China’s biggest economic problem, though, is one its officials won’t admit: The Communist Party’s stifling control of the economy through state-owned enterprises (SOE). At the government’s direction, SOEs keep open unprofitable enterprises to avoid layoffs and social unrest. Knowing that the government will rescue them, the SOEs often invest recklessly or for corrupt reasons. With SOEs selecting and leading OBOR projects, China is not solving its economic inefficiencies, it magnifies them to an international scale.
OBOR’s promises are unlikely to become reality. But China is already a dominant power in Asia and its neighbors are watching its rise with alarm. America should improve the Trans-Pacific Partnership treaty and offer it again to Asian countries as an attractive alternative to Chinese economic hegemony. America’s economic, military and political involvement remains the essential ingredient for a prosperous and peaceful Asia