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Invest, Indebt, Incapacitate: Is China Replicating Its ‘Xinjiang Model’ In BRI Countries?

Invest, Indebt, Incapacitate: Is China Replicating Its ‘Xinjiang Model’ In BRI Countries?

21 August 2020

China has been aggressively promoting its Belt and Road Initiative (BRI) through massive investments in participating countries, as a means to further its strategic, economic and political goals. Such a strategy bears striking similarities to its policies in the Xinjiang province. This paper attempts a comparative study between Xinjiang and BRI countries in South and Central Asia to highlight the issues these states will likely face in the coming years due to growing Chinese influence.


Attribution: Ayjaz Wani, “Invest, indebt, incapacitate: Is China Replicating its ‘Xinjiang Model’ in BRI Countries?” Occasional Paper No. 268, August 2020, Observer Research Foundation.


Introduction

Since the turn of the 21 st century, China’s initiatives in Eurasia have been driven by its global ambitions, and domestic economic and political concerns. The powerful Chinese Communist Party (CCP) has had a defined strategy to overtake the United States (US) as the world’s dominant economic power by 2049.[1] Domestically, China has seen an excess production of iron, steel, cement, aluminium and other building materials,[2] which, officials have said, could be turned “into an opportunity by ‘moving out’ this overcapacity on the basis of [China’s] development strategy abroad and foreign policy”.[3]

In 2013, Chinese President Xi Jinping unveiled the One Belt One Road initiative—later rechristened the Belt and Road Initiative (BRI)—an infrastructure development strategy to encourage Chinese firms to invest in foreign countries using loans from Chinese state-owned banks.[4] Most of the infrastructural development work in these countries is done by Chinese workers and firms that would have otherwise been idle, given the oversaturated domestic market.[5] About 89 percent of all contracts for BRI projects have gone to Chinese construction companies, 7.6 percent to locals, and 3.7 percent to other foreign companies.[6] So far, China has invested over US$100 billion in such infrastructure projects,[7] and the estimated cost of the 70 BRI economic corridors is US$575 billion.[8] According to the World Bank, the completion of the BRI projects will boost trade and cut travel time in the economic corridors by 12 percent, lift 7.6 million people out of extreme poverty, and increase incomes by 3.4 percent. But the World Bank has also cautioned about the debt risks, stranded infrastructure, environmental and social risks, and corruption associated with the BRI.[9]

Some of the BRI participant countries, especially those with weak economies, have had to borrow funds from China for infrastructural projects, but have failed to repay their loans. Beijing has knowingly extended further loans to these countries, and converted financial and economic dominance into political leverage.[10] Through this political leverage, the debt trapped countries have been forced to hand over control of strategically valuable facilities such as ports, natural resources and land.

Through the BRI, China is pursuing a multidimensional agenda of projecting its economic might onto the weaker Eurasian economies while legitimising the CCP’s attempts to address domestic concerns over an economic recession or depression.[11] Loans for BRI infrastructural projects in other countries are designed to quickly cycle back into China as most of the contracts go to CCP-funded companies through opaque—and often questionable—government-to-government bids.[12] After the bids, “almost all of China’s overseas lending is extended via Chinese state-owned entities and the recipients also tend to be state-owned enterprises”.[13] Further, Chinese workers make up a bulk of the labour force engaged at the infrastructural projects in foreign countries, allowing China to keep its unemployment rate under control.[14]

Map 1: The Belt and Road Initiative

Source: International Institute for Strategic Studies[15]
Besides its global ambitions, China hopes to achieve an additional agenda through the BRI—consolidate its territorial aspirations and minimise the security threats in Xinjiang, the country’s most volatile and highly militarised western province. Xinjiang was conquered by Chinese rulers in the 19 th century and was incorporated into the empire as a province in 1878.[16] Xinjiang has experienced intermittent phases of autonomy and occasional independence, with the Chinese imperial powers having full control for only about 425 years.[17] Even on the eve of the Communist revolution in 1949, Xinjiang was independently ruled under the East Turkestan state. This long history of discord between the indigenous ethnic Uyghurs and the CCP authorities was reinforced after Beijing moved millions of Han people to the strategic and resource-rich parts of the province. Xinjiang is now known for repressive Sinicisation, hi-tech surveillance, re-education camps and the socio-economic exploitation of the indigenous Uyghur population.[18] The influx of the Han led to the further alienation of the Uyghurs, breeding militant separatism and even leading to some Uyghur youth joining global terror groups. China’s policy in Xinjiang over the past 70 years has seen a successful suppression of the ethnic Uyghurs, destruction of the region’s demography through the migration of the Han people, and the exploitation of the land’s resources and its geostrategic location.

Under the BRI, Beijing has successfully tightened its control in Xinjiang through repressive policies with the support of the elite in the neighbouring countries.[19] In exchange for Chinese investments and loans, the neighbouring Eurasian countries have banned Uyghur organisations and several Central Asian countries have intensified surveillance of their Uyghur populations.[20] Furthermore, in the enhanced security environment, Beijing has successfully exported tools of political repression throughout its immediate neighbourhood, especially in the debt trapped countries of Eurasia.[21]

The BRI has predominantly only been analysed through the lens of China’s geopolitical and economic motivations, with little attention to its larger impact on the participant countries. This paper is an attempt to find answers to a few key questions—What is the CCP’s ‘Xinjiang model’? Are there similarities between China’s policies in Xinjiang and the BRI countries? What will be the impact of the BRI on the population of the debt trapped countries? Will the BRI really boost economic development, or will it give rise to anti-state sentiments in these countries?

BRI: An Imperialist Agenda

When announcing its launch in Kazakhstan in 2013, Xi called the BRI the “project of the century”[22] that could boost trade and investments in the participant countries and enhance the living conditions of their citizens, and could increase global real income by nearly 2.9 percent,[23] encouraging the global community to collaborate with China to set up “an economic belt along the Silk Road”.[24] In a bid to make China more politically and economically secure and achieve its global ambitions, the CCP, under Xi’s leadership, also set aside the cautious approach of former paramount leader Deng Xiaoping. Under Deng, China’s strategy was to “hide its capacities and bide its time”.[25] The BRI, on the other hand, is a clear attempt by China to flaunt its capabilities and secure global predominance. Mega infrastructure projects under the BRI, such as railways, ports and highways, are exclusively constructed by Chinese companies with loans from Chinese state-owned banks, successfully projecting the country’s economic might. These projects have also created new opportunities for China to address its production overcapacity and unemployment concerns.

Figure 1: Trends in China’s Outward Investment and Construction Contracts

Source: World Bank[26]
China’s global postures under Xi, driven by economic, political and security concerns, differ from the country’s Maoist development model, which “combined tradition with development to achieve an egalitarian social setup by using indigenous technologies”.[27] The Maoist model viewed Western aid and technologies as tools of imperialism.[28] But, crucially, China’s BRI policy is imperialist as well. Through the BRI, China is seeking to gain control of strategic ports, natural resources and land in debt trapped countries by transferring technologies and providing aid for infrastructure development via a closed process, all for its own economic and geostrategic gain.[29] Through such methods, Beijing has used corruption to create a social class in the participant countries that is happy to serve its imperialistic interests. As such, Beijing’s BRI strategy appears increasingly similar to its Xinjiang model.

Decoding China’s ‘Xinjiang Model’

Xinjiang, which has long had tense relations with Beijing, became the country’s most volatile province when the native Uyghurs pressed for their rights through anti-state agitations in the 1980s.[30] The tipping point came in April 1990, in what is known as the Baren Township uprising, when Uyghur militants clashed with Chinese forces in a bid to establish an East Turkistan state.[31] Six police officers were killed in the ensuing riots, in which the Uyghurs used bombs and pistols, and the Chinese authorities came down on the local population with fierce force. In 1999, to quell growing anti-China sentiments and historical ethnic tensions, the CCP launched the ‘Great Leap Forward’ campaign to develop the country’s western frontier. The Great Leap Forward was an economic initiative to integrate those living in Xinjiang, especially Uyghurs, into the Chinese cultural order.[32] Under this initiative, Beijing invested in infrastructure projects in the region, primarily to cater to the Han population, who had made their way to Xinjiang in large numbers.[33] Most infrastructure projects, such as pipelines, airports, railways, telecommunication networks and electricity lines, were executed by the Xinjiang Production and Construction Corps, which was formed in the 1960s and facilitated the migration of the Han to Xinjiang.[34]

Table 1: Population of Ethnic Groups in Xinjiang, 1941 to 2010
Ethnic Group19411945195319641982199020022010
Uyghur

2,984,000

80%

2,988,528

75.49%

3,640,000

74.7%

4,021,200

54%

5,995,000

45.8%

7, 195,000

47.5%

8,692,300

45.7%

9,479,734

43.5%

Han

187,000

5%

222,401

6.1%

299,000

6.1%

2,445,400

32.9%

5,284,000

40.0%

5,696,000

37.6%

7,595,700

39.87%

8,725,334

40%

Kazak

326,000

8.7%

381,575

9.6%

492,000

10.1%

501,400

6.7%

903,000

6.9%

1,106,000

7.3%

1,333,500

7.0%

1,810,507

8.3%

Hui

92,000

2.5%

99,607

2.7%

150,000

3.1%

271,100

3.6%

567,000

4.3%

682,000

4.5%

854,600

4.5%

1,090,667

5%

Kyrgyz

65,000

1.7%

69,923

1.9%

68,000

1.4%

69,000

0.9%

112.000

0.9%

140,000

0.9%

171,300

0.9%

196,320

0.9%

Others

76,000

2%

196,316

5.4%

225,000

4.6%

133,500

1.8%

220,500

1.7%

337,900

2.2%

404,500

2.1%

349,013

1.6%

Total3,730,0003,958,3504,874,0007,441,80013,081,50015,156,90019,049,900,21,813,334

Source: Ayjaz Ahmad Wani[35]

The primary objective of pushing Han migrants into Xinjiang was to ensure the “subjugation of the national minorities”.[36] Geopolitically, Beijing was keen to keep anti-state sentiments in check and to dilute the province’s ethnic makeup to establish political control.[37] Importantly, China also wanted to secure Xinjiang from international influences, particularly from the former Soviet Union, with most of the non-Han families living along the border being replaced by the Han and CCP members to curtail Soviet influence.[38] Geoeconomically, Beijing wanted to take advantage of the abundant natural resources, such as hydrocarbons, precious metals and minerals, with thousands of Han working at the Yumen oilfield and on other large mining projects in Xinjiang.[39]

Although the Han population initially settled on the fringes of the province until political control was established, they soon claimed land, constructed roads and railways, and set up industries and refineries, which ultimately helped in the development of Han colonies. They also began extracting rich natural resources like petroleum and gas.[40] Since 1949, the native Uyghurs have been reduced to a negligible minority in most new cities developed in northern Xinjiang, such as the capital Urumqi  (73 percent Han), Karamai (75 percent Han) and Shihezi (94 percent Han).[41] Additionally, modern industries, educational institutions and health services were only set up in the Han-dominated areas.[42]

The CCP maintains that the development of its western provinces under the Great Leap Forward initiative will increase the prosperity of all ethnic groups and will secure the western provinces from ethnic tensions, separatism and violence.[43] However, this has not been the case in Xinjiang. The Uyghurs, who until 1949 were at the forefront of trade and socio-economic development, have now been marginalised by the Han, who have come to dominate all sectors of the economy, except agriculture (see Table 2).

Table 2: Xinjiang labour force composition, by ethnicity

EmploymentHan %Uyghur%
Managers and administrators3.990.83
Professional and technical workers11.125.35
Clerical workers6.101.93
Sales and service workers17.205.41
Manufacturing and transportation workers24.735.84
Agricultural workers36.7780.51
Others0.080.13

Source: Yufan Hao and Weilhui Liu[44]

The Han community controls all secondary and tertiary economic sectors in Xinjiang since the CCP has accorded them special privileges to be employed in industries and manufacturing units. Even in the agricultural sector, where the Uyghurs dominate, there is a huge disparity in incomes—in 2000, the average income of Uyghur peasants was RMB 732 (US$105) and RMB 2,680 (US$386) for Han peasants.[45] The wide economic disparity, cultural persecution and forced Sinification has marginalised the Uyghurs and curtailed most of their rights. The CCP has also encouraged inter-ethnic marriages by offering Uyghurs better social benefits and even granting a RMB 3,000 (US$402) stipend for Han men who married Uyghur women and vice versa.[46] Many Uyghur girls are also forced into marriages with Han men, as a means to erode the local cultural identities and promote assimilation into the Han culture.[47]

The increased marginalisation of the Uyghurs led to many revolts in Xinjiang in the 1990s, with hundreds dying in the violence. Beijing responded with firm political repression. The CCP also used the rhetoric of Uyghur terrorism to ward off global pressure, especially from the West, and justify its harsh policies.[48] In 2000, a section of the Uyghur population formed the Eastern Turkistan Islamic Movement, a militant group later known as the Turkistan Islamic Party,[49] to get independence from China. Uyghurs were also known to have actively worked with other terror organisations, such as the Hizb-ut-Tahrir and Islamic Movement of Uzbekistan in Central Asia.[50] China’s policies, including preventive repression, increased securitisation, political violence and crackdown, have led an estimated 5,000 Uyghurs to join global terror groups like ISIS and al-Qaeda,[51] the leaders of which have also made statements targeting China.[52]

Despite its domestic volatility, Xinjiang is of immense geostrategic significance to China as a direct link to Central Asian, West Asian and European markets, placing it at the heart of the BRI, including the controversial and sensitive China Pakistan Economic Corridor (CPEC).

In 2017, Xi called for a “great wall of iron” to secure the BRI and safeguard Xinjiang.[53] Following the announcement, more than 1.5 million Uyghurs—and Kazaks, Kyrgyz and Uzbeks living in Xinjiang—were sent to “re-education camps” and forced to pledge loyalty to the CCP, learn Mandarin, and denounce Islam and their culture.[54] Through these camps, the CCP is trying to erode Uyghur culture. Through the BRI, Beijing has tried to silence the voices of the Muslim world and build global coalitions in support of its policies in the region.[55]

The CCP’s Xinjiang model is guaranteeing China security through economic development, but the gains are only for the Han. China has used separatism and terrorism as excuses for the political and socio-economic repression of the Uyghur minorities and increased securitisation of the province. Variants of the Xinjiang model can now be seen in the neighbouring debt trapped countries through the mega investments in BRI projects.

Xinjiang model and BRI objectives

The BRI encompasses 125 countries and aspires to improve the socio-economic fabric of more than two-thirds of the global population.[56] Since 2013, the BRI has become the centrepiece of Xi’s ambitious drive to make China a global hegemon, and it was integrated into the CCP charter at its 19th Congress in 2017.[57] Xi has promoted the BRI as an enterprise that will “deliver benefits well beyond [China’s] borders.[58] However, the BRI has remained China-centric. While several participant countries have raised issues of debt sustainability,[59] many developing countries in China’s neighbourhood—such as Pakistan, Tajikistan and Kyrgyzstan—have found themselves debt trapped on account of mega Chinese investments in domestic infrastructure projects.[60] China has also established markets for its IT and telecoms technologies in these countries, which have political and geostrategic implications. Through these technologies, Beijing has tried to export surveillance and impose censorship, and, in some cases, gain access to sensitive information and data. China has also tried to export tools of political repression to its neighbourhood, though they remain outside CCP control.[61]

China has also exploited the growing socio-economic weaknesses in participant countries to serve its own vested geoeconomic and geostrategic interests, and encourage autocratic tendencies by resorting to corrupt practices. The BRI has thus helped China promote its own repressive and illiberal communist agenda by undermining the existing governance standards in the recipient countries.[62]

This scenario has also been to the advantage of the autocratic-minded elites in several Central Asian countries, who share strong political, ideological and economic legacies with the former Soviet Union.[63] As Beijing did not seek any guarantees on human rights, the rule of law or democracy from these countries, their rulers were free to promote repressive regimes and even challenge the global norms of democratic institutions.  Most of the South Asian countries that have sought Chinese BRI investments, such as Myanmar, Pakistan and Sri Lanka, have politically weak dispensations that prefer assistance that does not also mandate socio-political or economic reforms.[64] Additionally, the CCP has successfully furthered China’s interests in the participant countries through the corrupt policy of closed and hidden deals for BRI projects.[65] Such tactics have created a social class in these countries that is a willing participant in China’s global plans. Beijing has also used its economic clout to silence any opposition to the BRI. For instance, in Pakistan, a huge BRI contract was awarded to a close aide of Prime Minister Imran Khan, who used to be one of the fiercest critics of the controversial CPEC.[66] In Kyrgyzstan, former prime ministers Sapar Isakov and Jantoro Satybaldiev have colluded with Chinese officials to embezzle funds earmarked for BRI projects.[67] In Sri Lanka, Prime Minister Mahinda Rajapaksa lost the 2015 presidential elections after being accused of corruption and nepotism over BRI projects.[68] Such incidents give credence to US Secretary of State Mike Pompeo’s criticism of China for peddling “corrupt infrastructure deals in exchange for political influence,” and using “bribe-fuelled debt-trap diplomacy” to undermine good governance.[69]

Several private security establishments have been set up to protect Chinese investments in the BRI countries,[70] most of which are either run by currently serving or former personnel of China’s Ministry of Public Security. For instance, following the deaths of three Han workers in a terrorist attack in Mali, the market for Chinese overseas security forces grew by US$10 billion.[71] China has also deployed tools such as drones to ensure the security of its investments and provide protection to Han workers at these project sites.[72]

South Asia

Almost all countries in South Asia, an area where India has the greatest influence, have accepted Beijing’s assistance for economic development. Baring India and Bhutan, all South Asian countries have participated in the BRI, lured by the promise of socio-economic transformation and development.[73] The South Asian countries initially looked at the BRI as an economic opportunity for their development. However, the BRI’s China-centric approach was soon exposed when the projects gave rise to widespread corruption and favouritism, lacked transparency, encouraged social upheavals, and had devastating environmental impacts. Bangladesh, for instance, was quick to realise the BRI’s hidden agenda and came up with counterstrategies to thwart its China-centric imperialist approach by recalibrating its foreign policy and increasing its bargaining capacity.[74] Bangladesh has refused assistance from China under the BRI if projects lack political and economic viability, and is reducing its dependence on Beijing-led funding. It has already terminated a US$2 billion contract with the Chinese Harbour Engineering Company to construct a 214-kilometre highway over alleged corruption, choosing to finance the project on its own at a decreased cost of US$1.5 billion.[75] Furthermore, Bangladesh has not conceded the development of its ports to any one country; the Payra port, for instance, is being developed with the assistance of India, Japan and China.

Pakistan, on the other hand, became debt trapped, and has been forced to cede its strategic port of Gwadar and large tracts of land to Beijing under several CPEC agreements. Chinese inroads in Pakistan through the BRI pose a direct threat to India, and the relationship between China and Pakistan under the BRI serves as a counterweight to the growing US-India strategic cooperation in the region.[76]

Pakistan

Ties between China and Pakistan, now an “all-weather friendship,” date back to the 1960s, when Pakistan helped the CCP gain favour in West Asian countries.[77] Beijing has invested over US$62 billion in infrastructure and energy projects under the BRI in Pakistan.[78] The CPEC, which runs through Pakistan-occupied Kashmir, provides an alternative pathway for exports and energy imports from West Asia to China, linking its western provinces to key global sea lanes through Pakistan’s Gwadar port. Considered the “gateway to Asia,” the port is Beijing’s most advantageous geostrategic and geoeconomic BRI venture.[79] Given the strategic location of the port, China’s plans to reroute its oil imports through Pakistan directly to Xinjiang for onward distribution into the mainland (through a US$2-billion oil refinery at Gwadar),[80] instead of the current transit routes in the US-controlled Strait of Hormuz in West Asia and the Strait of Malacca in South East Asia.[81] The CCP has maintained that the CPEC will bring political stability and economic resilience to Pakistan, and help Beijing secure its domestic energy supplies.[82] ,[83]

China also sees ties with Pakistan through the Xinjiang strategic utility and internal security angle. Beijing’s concerns of unrest in Xinjiang and the possible presence of violent Uyghur opposition groups in terror havens in the Afghanistan-Pakistan region make Islamabad an essential partner for regional security. Beijing has also hobnobbed with Pakistan-based non-state actors like the Taliban and the UN-designated international terrorist Masood Azhar to ensure security and stability in its restive Xinjiang province.[84]

At the same time, mounting BRI debts have rendered Pakistan a puppet in China’s hands. Unable to pay off the debt, Pakistan was forced to lease the Gwadar port to a Chinese company for 40 years.[85] Beijing has also designed its BRI agreements under the CPEC to ensure full recovery of its investments through a port-park-city (PPC) model.[86] Under the PPC model, the development of the Gwadar port will be followed by the construction of a China-funded industrial park with amenities like hospitals, schools, university, airport and a golf resort on a nearby free trade zone spread over an area of 2,281 acres.[87] Being constructed at an estimated cost of US$150-million, the gated ‘proxy colony’ is expected to exclusively house 500,000 Chinese Han nationals, who will come to work in the area, by 2022.[88] The ongoing work under the PPC model has already dislocated many natives and fisherfolk from the port city, leading to protests in the Balochistan state. Turning a blind eye to the misery caused by the BRI projects, especially around Gwadar, Khan reaffirmed Islamabad’s commitment to the controversial CPEC during his visit to China in October 2019.[89] Since then, the migration of the Chinese people to Pakistan has increased exponentially, with about 10,000 Chinese said to be living in Islamabad and another 35,000 in other parts of the country.[90] Khan has also used the BRI carrot to quell opposition to Chinese investments in his own camp.[91] Under pressure from Beijing, Khan has given up his election-time opposition to the CPEC, awarding a US$2.2 billion dam construction contract to a company founded by his commerce and industry advisor Abdul Razak Dawood, who had previously been a critic of the CPEC and Chinese companies. [92]

Growing Chinese influence has also increased anti-state sentiments among the people of Balochistan, which is meant to be the biggest beneficiary of the CPEC in Pakistan. With the rampant exploitation of resources through CPEC projects and promises of jobs not materialising, the Baloch people have found themselves worse off, pushed further to the margins of the economy.[93] Terror group Balochistan Liberation Army (BLA) has intensified its demands for Baloch independence,[94] blaming Beijing for exploiting and making the province more volatile. It has also accused China of being Pakistan’s “partner in crime.”[95] By 2048, the BLA fears that the local population in the province will be outnumbered by Han immigrants,[96] giving rise to a similar situation as the Uyghurs face in Xinjiang. The Pakistan government has resorted to quashing the Baloch separatist movement using similar tactics as China does against the Uyghurs in Xinjiang. Over 47,000 Baloch are thought to have gone missing or disappeared, and in 2019 alone, more than 241 people were killed, 568 persons went missing, and numerous protesting students were targeted.[97]

Pakistan has launched several safe city projects to prevent crime through the installation of CCTV cameras, scanners and GPS to trace a person using their SIM number or IMEI number.[98]  Most of these technologies are being implemented by Chinese state-owned enterprises through soft loans companies.[99] In 2016, the Islamabad Safe City Project was completed,[100] which included facial recognition and vehicle management system.[101] In 2019, a surveillance system was installed at the University of Balochistan, which sometimes led to the blackmail and harassment of the students.[102] Facial recognition cameras were even installed at airports in Pakistan to monitor the movement of people.[103] Similarly, the Lahore Safe City Project includes facial recognition, integrated communication platforms, multiple tracking operations and automated vehicle number plate recognition.[104] Through these safe city projects, China has “installed much of the Xinjiang digital security system across numerous Pakistani cities, including Islamabad, Peshawar, Lahore, Quetta, Karachi and Gwadar”.[105]

Central Asia

Kazakhstan, Kyrgyzstan, Turkmenistan, Tajikistan and Uzbekistan are strategically located at the crossroads of Asia and Europe. Most of these Central Asian countries remain autocratic, and share political, ideological and economic legacies with the former Soviet Union. Economic and political stability in Central Asia was critical for China, as any instability or conflict in the region could spill over into Xinjiang. With most multilateral lending agencies not viewing these countries as part of the Global South, a necessary condition for assistance,[106] Beijing started offering them loans under flexible conditions after the demise of the Soviet Union.[107] Kyrgyzstan borrowed US$7.4 million in credit in 1994 and another US$14.7 million in 1998.[108] In 2005, Uzbekistan received a US$600 million loan from Beijing for the joint exploration of energy deposits.[109] In April 2009, Beijing signed a US$10-billion ‘loan-for-oil’ deal with Kazakhstan, and in the same year announced another US$10 billion loan for the Shanghai Cooperation Organisation (SCO) to help economically struggling members.[110] In 2011, it sanctioned a US$4.1 billion loan for Turkmenistan.[111] And in 2013, Xi unveiled the BRI in Kazakhstan, and all the five Central Asian countries became part of the project.

Only Kazakhstan, Turkmenistan and Uzbekistan have been able to sustain BRI debt thanks to returns from hydrocarbons and uranium exports.[112] Kyrgyzstan and Tajikistan, the less resource-rich Central Asian countries, are already under debt stress from China.

Kyrgyzstan

Kyrgyzstan, which is marred by political conflicts, economic troubles and ethnic strife,  is home to over 50,000 Uyghurs who were forced to flee Xinjiang during China’s Great Leap Forward campaign.[113] China has used its economic might to increase surveillance on the Uyghurs living in Kyrgyzstan and even forced the authorities in Bishkek to ban Uyghur organisations, such as the Free Uighuristan Party.[114] Furthermore, China and Kyrgyzstan have had a longstanding border dispute dating back to 1884, with Beijing using Bishkek’s economic and political instability after independence as a bargaining chip to gain control over 32 percent of the disputed land through pressure tactics.[115]

Once the border dispute was resolved, Beijing made deep inroads into the country. It invested in the construction of a national hospital, schools and some economically unsound infrastructural projects like the Chinese-Kyrgyz paper factory, which was built with a US$7.4 million investment from China. Production at the factory started in 2002 amid much fanfare, but it went bankrupt within three years after a state audit found Chinese employees indulging in major financial wrongdoings and corruption.[116] Since 2013, Beijing has promoted BRI infrastructure deals without competitive tenders to favour Chinese construction companies, which has worsened the lack of transparency.[117] For instance, in 2013, China’s Tebian Electricity Apparatus won a US$385 million contract to refurbish the Bishkek power plant without an open tender, through a loan from the Export-Import Bank of China (EXIM Bank).[118] Kyrgyz officials have said that had the country had the money for the project, it would have followed the proper tender procedures, but was forced to agree to the bank’s terms given the lack of financing options.[119] Such improper procedures have given rise to corruption, and Chinese officials have acknowledged that over 30 percent of the investments under BRI in Central Asia is lost to graft.[120]

Owing to such financial wrongdoings, Kyrgyzstan’s debt to China has increased manifold over the years. By 2016, of Kyrgyzstan’s US$4 billion foreign debt, half comprised of loans from China’s EXIM Bank.[121] As the debt pressure mounted, Kyrgyzstan was forced to insert a clause in the BRI agreements that transferred greater control over its assets to China if it defaulted on the repayment of loans.[122]

Figure 2: Kyrgyzstan’s Bilateral Credits—Share from Each Country (percent), 2016

Source: Marlene Laruelle[123]
At the same time, there has been an influx of Han migrants into Kyrgyzstan, most of whom have usurped the jobs of the locals and have even obtained fake visa documents through corrupt means or by marrying Kyrgyz women.[124] ,[125]  About 90,000 Chinese currently reside in the country,[126] although nationalist group Erkin El puts the number closer to 300,000.[127] In January 2019, Kyrgyz Prime Minister Kubatbek Boronov said that the anti-China sentiment among the people was due to fearmongering and that the annual net influx of the Chinese to Kyrgyzstan had been below 1,000 people in the last two years.[128] However, in 2018 alone, 35,000 Chinese were believed to have migrated to Kyrgyzstan.[129]

The increasing Han population in Kyrgyzstan has narrowed job opportunities for locals, and many have been forced to leave the country to seek employment in Russia and Kazakhstan.[130] The bilateral BRI agreements have fuelled anti-China sentiment, leading to protests and even violent conflicts against government apathy and Chinese presence in the country.[131] The Kyrgyz have demanded curbs on work permits provided to the Chinese, ban on Kyrgyz-Chinese marriages and a reduction of Kyrgyz debt to China.[132] The general public has also resorted to militant activities against the Han settlers. In August 2019, more than 500 villagers in Kyrgyzstan entered a mine operated by a Chinese company and injured 20 Han workers. Similarly, in 2016 at Bishkek, three Chinese Embassy officials were injured when a suicide bomber rammed his car in the gates of the building.[133]

To safeguard the Chinese workers and quell the anti-state and anti-Chinese protests in Kyrgyzstan, China introduced an advanced facial recognition system through the Chinese National Electronics Import and Export Corporation, a Beijing-based defence equipment supplier responsible for introducing the facial recognition security grid in Xinjiang.[134] The access to real-time information on the movement of people and other sensitive information is being monopolised and can be used by Chinese companies that enjoy close ties with Beijing’s military establishment.[135] Hence, such surveillance technologies have emerged as a major component of China’s export of its techno-authoritarian model of governance.

Tajikistan

Tajikistan, which borders China, has also faced severe economic and political issues. Through the SCO, China extended US$600 million in credit to Tajikistan and financed key projects, such as the Dushanbe-Chanak highway.[136] In 2006, the Tajik government prepared proposals for 53 projects at an estimated cost of US$1 billion, and China, through its EXIM Bank, entered the country by approving three big projects.[137] By 2008, China was Tajikistan’s largest investor and its biggest debt holder.[138] As the Tajik government was unable to repay the loans, Beijing leveraged the debt into a land-grabbing tool—Tajikistan was forced to cede 2,000 hectares of that arable land exclusively to 1,500 Chinese farmers for rice cultivation.[139] According to estimates, the number of Chinese workers in Tajikistan has soared to 150,000.[140]

Once Tajikistan became part of the BRI, investments were offered with a clause that transferred greater control over local assets to China if it defaulted on repaying its loans. By 2016, Tajikistan’s debt to EXIM Bank reached US$1.1 billion, and the country now owes China over US$1.38 billion.[141]

Figure 2: Tajikistan’s Bilateral Credits—Share from Each Country (percent), 2015

Source: Marlene Laruelle[142]
China has also successfully stationed its troops near the Tajik city of Shaymak to monitor Afghanistan’s Wakhan Corridor to mitigate the security risks from porous Tajik-Afghan border.[143] This illustrates how China’s hard power footprint has expanded alongside its economic might in its neighbourhood. In December 2019, Beijing also acquired a stake in an aluminium plant in exchange for cash injections.[144]

In 2013, Tajikistan also partnered with Chinese telecoms giant Huawei to implement the advanced facial recognition system and install security cameras in the country, in a US$22 million deal.[145] In 2019, the Tajik government declared that everybody with a mobile SIM card would need to re-register under a new type of an ID, which collects the holder’s name, address, fingerprints and blood type,[146] raising concerns over the purpose of the exercise.

The much-hyped BRI has not had any major positive socio-economic impacts in Tajikistan. Instead, China has been able to make money and provide ample employment opportunities for its people. The Tajiks have been forced to go to Russia in search for jobs; in 2019, about 500,000 Tajik travelled to Russia, while Russian sources put the number at over one million.[147]

Conclusion

China has used the BRI as a geostrategic and geopolitical tool to strengthen and expand its own imperialist agenda, as per its plan to be the world’s dominant power by 2049. Trapping participant countries in debt cycles serves this purpose. Through the BRI’s debt-trap diplomacy, China has taken control of strategic ports, lucrative mines and arable land in several Central and South Asian countries, and has moved a large number of Chinese Han to these regions, against the will of the locals.

There are similarities between the policies of the CCP in Xinjiang and the BRI strategy in South and Central Asia. After 1949, the CCP used Sinicisation through the migration of Han to strategic and resource-rich locations to control the Xinjiang region. In Central and South Asia, China has used its economic prowess for neo-colonial purposes by moving the Han in large numbers to strategic and resource-rich locations near mines and ports. Most of the local population, whether in Pakistan, Kyrgyzstan or Tajikistan, have yet to reap any benefits from these projects. This economic alienation has led to violent protests in these countries, with a rise in anti-state and separatist sentiment.

The COVID-19 pandemic has provided China with an opportunity to be more assertive in these economically fragile countries. The CCP can now exploit the pandemic-induced stress for the settlement of more Han in these countries. The increased Han migration could lead to serious economic, social and cultural repercussions, and could prove a boost for global terror outfits, much like what happened in Xinjiang.

In the post-COVID-19 world, increased interference by China in debt-trapped countries will have strategic and economic implications for India. Pakistan has to pay about US$615 million to China between May 2020 and June 2021 for debt incurred through the BRI projects, and it has already sought ease in repayment obligations of over US$30-billion worth of investments under the CPEC.[148] Tajikistan and Kyrgyzstan are also in talks with China for debt relief amid the COVID-19 crisis.[149] This gives China the upper hand, which it could use to force Pakistan, Tajikistan and Kyrgyzstan to grant it access to their strategic ports for military purposes. At the same time, rising anti-China sentiments in these countries could lead to an increase in terrorist recruitment, which will have severe repercussions for India. It is thus necessary for India to revisit its foreign policy with greater vigour in the post-COVID-19 world to curtail Chinese aggression in its immediate and extended neighbourhood.


About the Author

Ayjaz Wani is a Research Fellow at ORF, Mumbai.


Endnotes

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[143] Gerry Shih, “In Central Asia’s Forbidding Highlands, A Quiet Newcomer: Chinese Troops,” Washington Post, February 19, 2019.

[144] “Tajikistan to Yield Share in Aluminum Plant to China,” Eurasianet, December 5, 2019.

[145] Yan, “China Taking Big Brother to Central Asia”

[146] Yan, “China Taking Big Brother to Central Asia”

[147] Farangis Najibullah, “Tajik Workers Face Dire Future As Russia Closes Borders Over Coronavirus,” Radio Free Europe, March 18, 2020.

[148] “High-Risk Countries Approach China for Debt Relief,” Dawn, May 1, 2020.

[149] “Kyrgyzstan Asks China for Debt Relief Amid Economic Strain of Pandemic,” Radio Free Europe, April 15, 2020.

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