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HOW TO ASYMMETRICALLY OUT-COMPETE XI JINPING’S ONE BELT ONE ROAD INITIATIVE


MARCH 2, 2021
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Beijing’s One Belt One Road project is an aggressive attempt to expand Chinese influence in the Indo-Pacific. Indeed, Chinese President Xi Jinping calls it “a project of the century.” But for Washington to respond head-on, trying to match it port-by-port or road-by-road, would simply allow China to set the agenda. Instead, the United States should compete on its own terms with an asymmetric foreign assistance strategy that draws on its natural strengths. This means preventing the rise of an illiberal world order by promoting open commerce, fair rules for the digital space and freedom of the seas. With such an approach, the Biden administration can make good on its vow to “out-compete” China.

One Belt, One Road, Multiple Challenges

To understand Xi’s One Belt One Road, we must place it in the context of China’s contemporary domestic politics, historical identity and international public relations efforts. At home, “One Belt One Road” carries powerful metaphoric and rhetorical weight. It alludes to the imperial tributary system that placed China at the center of world power. It also enables the regime to unify China’s disparate economic and foreign policy activities under one harmonious slogan that resonates with the public. Abroad, the Chinese regime refers to One Belt One Road with the more benign-sounding name “Belt and Road Initiative.” This language serves to emphasize China’s peaceful re-emergence and highlight its role as a dispenser of public goods to less developed countries.

 

 

But what lies beneath this rhetoric? In his outstanding bookOne Belt One Road: Chinese Power Meets the World, China scholar Eyck Freymann deciphers Beijing’s opaque plan and jumbled pronouncements by focusing on its multi-billion-dollar proposed port projects in Greece, Sri Lanka, and Tanzania. Some observers have compared One Belt One Road to a “Trojan Horse,” depicting it as a highly strategic enterprise for expanding China’s dominance. Freymann, by contrast, sees Beijing acting haphazardly and pragmatically. But that does not make the project as a whole any less threatening to U.S. and allied interests.

Understanding One Belt One Road requires appreciating both its haphazard nature and its ambition. Although One Belt One Road may have been a hazy concept when first launched, it has become the most visible means of waging a contest over global governance and selling the narrative that Beijing seeks to build “a community of common destiny for mankind.” The multi-dimensional One Belt One Road remains opportunistic, politically driven, and evolving. But it has also become a potent tool of grand strategy, advancing China’s sovereignty and domestic stability, economic interests, and industrial-military power.

There’s a lot of silk weaving all of these global Chinese threads together. Xi’s creation of One Belt One Road not only subsumed many preexisting projects but brought together a diverse assortment of projects under a new name. In 2013, Xi announced a land-based “Silk Road economic belt” and a sea-based 21st Century Maritime Silk Road, creating the notion of “One Belt One Road” to restore a lost past. Since then, Beijing has added, among other things, a “Polar Silk Road” to the Arctic, a “digital Silk Road” of 5G telecommunications systems, and a “spatial information corridor” featuring a state-of-the-art BeiDou satellite navigation network. Amid the pandemic and a renewed push to curb climate change, China has also added a “health Silk Road” and a “green Silk Road.”

The welter of China’s projects is confusing in itself, but the financing behind One Belt One Road can be even more opaque. The scale of China’s funding remains uncertain, with estimates ranging between $1 and $8 trillion. China’s expenditures are probably closer to the $1 trillion estimate. But that is still a hefty amount. In today’s dollars, the United States spent less to help rebuild war-torn Europe with the Marshall Plan than Beijing’s spent on overseas infrastructure projects in recent years.

With all this money, China wants to make the architecture of global governance more favorable to Beijing and less beholden to the United States. Thus, if China’s multi-faceted One Belt One Road remains incomprehensible to the outside world, part of the reason is that Beijing wishes to operate outside of the constraints of existing global institutions. It is instructive that the Marshall Plan led to the Organization for Economic Cooperation and Development in Paris, where wealthy donor countries haggle over the goals and rules of development assistance. China remains “a non-member economy,” unbound by the organization’s rules, and is now busy building its own alternative international institutions. Biennial Belt and Road Forums for International Cooperation give Xi a platform to receive some 30 to 40 leaders and thousands of delegates representing more than 130 countries, who all pay homage to China’s narrative of benevolence.

Authoritarian leaders understandably prefer China’s brand of state-to-state foreign assistance free from human rights and environmental constraints. But they also fear losing sovereignty when accepting China’s largesse. Chinese projects have been beset by charges of coercion, debt traps, and buyer’s remorse, but the story is more complicated: Greece’s Piraeus port project is a poster child for One Belt One Road success. The jury is still out on whether Sri Lanka’s Hambantota will make enough revenue to pay its debt. And Tanzania’s Bagamoyo is unlikely to get started. China did not inveigle Sri Lanka to accept unfavorable financing and loss of control over the Hambantota Port, but Sri Lanka’s “strategic promiscuity” designed to spark a bidding war from outside suitors came at a price. After becoming so dependent on Beijing for financing, technology, and assistance, Colombo will likely to be less receptive to working with India, Japan, the United States, and other liberal democracies. Or consider Beijing’s $50 billion commitment to the China-Pakistan Economic Corridor. The level of Chinese infrastructure financing cannot be explained by economic considerations alone. Even if it is not “a bottomless pit” that draws China into trying to co-govern Pakistan, it was undoubtedly designed with long-term political ambitions in mind, as well as an eye toward geopolitical locations that might provide future military access or basing. In, short China’s approach carries real risks but also provides ample opportunities for Washington to offer a better model.

America’s Fledgling Response

The United States and its allies do not have to outspend China to outcompete it. Rather than trying to emulate China’s occasional profligacy, they can instead exercise their financial clout in more effective ways. The United States can best counter China’s efforts by offering an alternative model of international cooperation that is both generous and built on universal human rights, democracy, and equality. The Biden administration is busy assembling its best ideas for ensuring open institutions and safeguarding vulnerable supply chains. In doing so, it should also seek out projects that offer Indo-Pacific countries an attractive portfolio of trade and foreign assistance.

A significant economic and diplomatic response to One Belt One Road by the United States and like-minded partners will go a long way to weakening China’s attempt to push deep into the Indo-Pacific region. Assessing China’s One Belt One Road challenge, the vital U.S. objective is to prevent China from forming a large group of dependent states into a techno-authoritarian coalition or a geopolitical bulwark arrayed against a liberal international order. This requires helping Indo-Pacific countries retain their strategic autonomy while encouraging freedom and the rule of law.

Obama’s “rebalance” to Asia started in the right direction but failed to follow through with sufficient resources. The Biden administration can double down on prior U.S. efforts while making Indo-Pacific engagement and foreign assistance part of a comprehensive policy for building back U.S. and global institutions. President Biden understands what needs to be done. In his first weeks in office, he has already established an Indo-Pacific czar at the White House and filled it with the capable Kurt Campbell. But the more demanding tasks remain ahead. The president knows that the United States must focus on building rules and norms that will govern the rest of this century amidst rapidly changing trends in technology, climate change, and space exploration.

An Asymmetrical Response

The Defense Department’s global force posture review and China task force will undoubtedly affirm the need to continue to invest in a dispersed forward military presence throughout the Indo-Pacific. But even more than new military investments, the United States needs to revitalize its ability to shape the regional order using diplomatic and economic instruments of power. This requires an asymmetric strategy focused on the most historically important and currently threatened facets of this order: open commerce, fair rules for the digital space, and freedom of the seas.

Open Commerce

Previous presidents recognized the need to counter One Belt One Road economically but failed to offer an alternative. The Obama administration kept One Belt One Road at bay by dismissing efforts such as the Asian Infrastructure Investment Bank. The Trump administration adopted the Japanese slogan of a “Free and Open Indo-Pacific” and ratcheted up criticism of China’s more predatory policies. Now Washington needs to go further by devoting more attention to positive and cooperative initiatives.

Rebuffing multilateral trade arrangements in Asia put the United States at a disadvantage relative to China. Trump jettisoned America’s leading regional economic initiative by withdrawing from an incipient, 12-nation Trans-Pacific Partnership. In attempting to fill the resulting void, Washington successfully augmented two important financing vehicles. Creating the International Development Finance Corporation and reauthorizing the Export-Import Bank expanded Washington’s capacity to fund international projects. Now, the Biden administration should continue to champion these institutions. Similarly, the Blue Dot Network, founded in 2019 to provide a good housekeeping seal of approval on “quality infrastructure” projects, needs to be operationalized.

But an asymmetric alternative to One Belt One Road requires the United States to do more to engage in multilateral trade. With negotiations for a Regional Comprehensive Economic Partnership complete, the United States is not a partner to either of the region’s sizeable multilateral trade agreements. Biden should seek to rectify this missing dimension of U.S. policy. Although it will take several years to come to fruition, the Biden administration should quietly explore how to rejoin the Trans-Pacific Partnership (now formally the Comprehensive Progressive Trans-Pacific Partnership). As Katherine Tay said during her testimony to become U.S. Trade Representative, the Trans-Pacific Partnership “is still a sound formula.” Perhaps, as David Dollar and Jonathan Stromseth suggested, the United States could use a digital backdoor to re-engage the 11 signatories of the Comprehensive and Progressive Trans-Pacific Partnership by proposing an open-data agreement while seeking new bargains on labor and environmental issues. That would give the administration time to ensure that any trade agreement is accompanied by policies that benefit most Americans.

Fair Rules for the Digital Space

One Belt One Road provides China with an innocuous brand name for investments related to the control of information. The information domain is where the United States and its regional allies and partners should develop their digital silk road of non-Huawei 5G telecommunications, undersea cables, and data stations. The secure flow of information is made more urgent in the Indo-Pacific because of China’s crackdown on Hong Kong, which has served as a regional internet exchange hub. The United States, Japan, and Australia have taken critical strides in this direction over the past few years. Three years ago, Canberra blocked Huawei Marine from leading a project to lay an undersea cable between Sydney and the Solomon Islands. Last year, Huawei Marine lost out on building an undersea cable connecting Chile and Asia.

But Washington did not just prevent China from creating its preferred form of digital connectivity, it worked with allies to develop a constructive alternative. In 2018 the United States, Japan, and Australia announced a Trilateral Partnership for Infrastructure Investment in the Indo-Pacific. In 2020, the Trump administration’s new Development Finance Corporation approved a $190 million loan for a Trans Pacific Networks submarine fiber-optic cable from Singapore to the United States, with branches serving Indonesia, Guam, and beyond. Significantly, the cable’s undersea placement is outside of the South China Sea. In January, the three countries agreed with Palau to build a second and more secure undersea cable. In response to Chinese overtures in the South Pacific, the United States, Japan, and Australia have embarked on other development efforts. In Papua New Guinea, for example, Washington cooperated with its South Pacific allies to install an undersea fiber-optic cable in Palau and bring both electrification and a joint naval base to Manus Island. This represents a model of strategic development that can be emulated elsewhere in the region.

If submarine cables and ports are the hardware of China’s Maritime Silk Road, then governance rules are the necessary software. Beyond promoting trade and specific projects in the Indo-Pacific, the United States needs to coalesce a majority of countries around fair and favorable rules — what some have called the operating system. New forums, such as a group of democracies or “D10,” can help forge these rules. This effort could begin with the four members of the Quadrilateral Security Dialogue (the United States, Japan, Australia, and India) developing trusted systems for sharing information such as financial data and common operating pictures. Such “D10” initiatives could also pave the way for engaging China in new domains and establishing rules for cyberspace, outer space, climate change, and robotic weapons.

Freedom of the Seas

The global economy hinges on the movement of goods at sea through vital maritime chokepoints, as well as the movement of internet data through submarine cables. This is why any U.S. response to One Belt One Road should include a firm commitment to maintaining freedom of the seas.

Freedom of the seas undergirded Obama’s pivot to Asia, as well as Australia’s more recent “South Pacific step up.” For Beijing, China’s geographical position is naturally challenging. The dream of reducing the country’s dependence on moving goods and resources through the Malacca Strait (China’s so-called “Malacca dilemma”) is impeded by the fact that shipping remains far less expensive than travel over land. There is a good reason why China invests in 21st-century naval power and ports, telecommunications infrastructure, and areas astride critical chokepoints. But, in preventing other powers from being able to “interfere” with its interests, China should not be allowed to deny foreign powers access to international waters and airspace. The United States needs to be attentive to its sea lines of communication, including trade, digital communications, and freedom of navigation in maritime Asia.

Japan is working with archipelagic Indonesia to develop radars adjacent to significant chokepoints and waterways. This is the kind of strategic real estate where the United States should help regional partners strengthen early warning systems to detect intrusions. The United States and its partners are more than up to the task of ensuring it has a state-of-the-art and resilient sensor network in the Indo-Pacific.

They also need to be mindful of China’s attempts to alter the rules unilaterally. For instance, the Biden administration is right to express concern that China might exploit a new law authorizing its coast guard to fire on other vessels in order “to assert its unlawful maritime claims in the South China Sea.” More concerning than the threat of force may be Beijing’s unwillingness to define the “jurisdictional waters” in which its coastal forces will operate. Regarding maritime governance, the United States should seek to negotiate a binding code of conduct with like-minded maritime countries in the Western Pacific, which could be used as leverage to negotiate rules of the road with China. U.S. diplomats should also work quietly to help states like the Philippines and Vietnam align their maritime claims in the South China sea with international law, specifically as handed down in 2016 by The Hague. Taken together, these steps could push back against China’s unlawful nine-dash line claims and the provocative measures Beijing has used to assert them.

Conclusion

Ultimately, the One Belt One Road challenge is about contested global governance in a digital era and not a competition over infrastructure projects or military primacy. This doesn’t mean the Biden administration shouldn’t consider a biannual global infrastructure summit for the region. But it does suggest such a summit need not be on a scale with the biannual One Belt One Road forums in China. More important will be developing fair rules that make countries in the region more economically competitive and less dependent on China.

The United States and its allies can offer other partners in the Indo-Pacific an alternative to the supposedly binary choice between America and China that makes them so uncomfortable. Countries should not be forced to decide between forfeiting economic gains to remain secure and surrendering their security to become prosperous. Indo-Pacific governments ought to be able to pursue both prosperity and security. By understanding One Belt One Road’s limitations and building on America’s strengths, Biden can mount an effective asymmetric response to One Belt One Road.

 

 

Dr. Patrick M. Cronin is the Asia-Pacific Security Chair at the Hudson Institute and was the third-ranking official at the U.S. Agency for International Development during the George W. Bush Administration.


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