Skip to main content

With Latest Sanctions, US Casts a Shadow Over China’s Belt and Road

China Communications Construction Company (CCCC) was targeted over its South China Sea island-building. But the firm is also a crucial player in the BRI.

Shannon Tiezzi
With Latest Sanctions, US Casts a Shadow Over China’s Belt and Road

Hambantota port in Sri Lanka

Credit: Wikimedia Commons/ Deneth17

On Wednesday, the United States announced yet another tranche of sanctions targeting Chinese companies. This time, 24 Chinese firms were added to the Entity List, which prevents them from doing business with U.S. companies.

According to the U.S. Commerce Department announcement, the companies have been targeted “for their role in helping the Chinese military construct and militarize the internationally condemned artificial islands in the South China Sea.”

In the words of Commerce Secretary Wilbur Ross, “The entities designated today have played a significant role in China’s provocative construction of these artificial islands and must be held accountable.”

However, as the Washington Post noted in its report on the sanctions, there will be little direct impact from listing the firms, simply because they don’t have much financial stake in trade with the United States. The “total U.S. exports to the companies amounted to $5 million over the past five years,” the Post reported, citing senior administration officials.

Instead, there is apparently a hope that the listing of the companies will have a deterrent effect on other countries that do far more business with them. The sanctions have “various aims, including, of course, to impose costs on bad actors and to encourage all sorts of parties and institutions and governments around the world to assess the risk and reconsider business deals with the sort of predatory Chinese state-owned enterprises we have identified here,” a senior State Department official told the Washington Post.

Enjoying this article? Click here to subscribe for full access. Just $5 a month.

And to that end, there seems to be one target that looms above the others: China Communications Construction Company (CCCC).

Pompeo hinted at that secondary purpose in his own statement:

CCCC led the destructive dredging of the PRC’s South China Sea outposts and is also one of the leading contractors used by Beijing in its global “One Belt One Road” strategy. CCCC and its subsidiaries have engaged in corruption, predatory financing, environmental destruction, and other abuses across the world.

The PRC must not be allowed to use CCCC and other state-owned enterprises as weapons to impose an expansionist agenda.

While the stated purpose of the sanctions, then, is punishment for artificial island building in the South China Sea, State Department officials have implied another goal: checking the Belt and Road Initiative (BRI) by targeting one of the state-owned enterprises at the heart of the project.

CCCC is a behemoth even by the standards of China’s state-owned firms. According to the company’s website, it is “the largest port construction and design company in China, a leading company in road and bridge construction and design, a leading railway construction company, the largest dredging company in China and the second largest dredging company (in terms of dredging capacity) in the world.” Given the company’s size and area of expertise – infrastructure construction – it should come as no surprise that CCCC has been intimately involved in many of the BRI’s top projects overseas.

Notably, CCCC has 34 subsidiaries, of which only five were placed on the Entity List by the U.S. Commerce Department. But some of those are directly involved in BRI project abroad – for example, CCCC Dredging (now on the Entity List) in 2016 signed a $328 million contract to do dredging and construction work for the Cebu International and Bulk Terminal Project in the Philippines. More broadly, however, Washington may be hoping for a chilling effect on even non-listed CCCC subsidiaries, such as China Harbor Engineering Company (CHEC).

CHEC is responsible for two mega-projects in Sri Lanka, often brought up as a poster child for white elephant BRI deals. CHEC is behind the $1.4 billion construction of Colombo New Port City in Sri Lanka. It was also involved in the infamous $1.5 billion Hambantota Port project, which was later leased to another Chinese firm to help Sri Lanka cover debt payments (although, contrary to a popular myth, not to directly repay the debts incurred building the port).

CHEC is also involved, as part of the CITIC consortium, in the $5.4 billion deepwater port in Kyaukpyu, Myanmar. Both the Sri Lanka and Myanmar projects have raised strategic concerns in India and the United States, as they involve Chinese-funded port infrastructure on the Indian Ocean. That feeds into the “string of pearls” narrative, which sees China attempting to use civilian infrastructure in other counties around the Indian Ocean region for its own strategic ends.

Beyond ports, CCCC has also been involved in the construction of some of the most prominent railway and road projects included in the BRI. In Southeast Asia, CCCC is the contractor for the East Coast Rail Link, a flagship BRI project in Malaysia. The company is also responsible for the Mombasa-Nairobi-Naivasha Standard Gauge Railway project in Kenya and the Addis Ababa ring road project in Ethiopia, as well as highways linking Ethiopia to neighboring Djibouti and its strategic port.

The company’s reach extends to Europe as well. In Italy, which joined the BRI to much fanfare (and, in the West, hand-wringing) in March 2019, CCCC will help upgrade infrastructure at Italian ports of Genoa and Trieste. The Chinese firm is also constructing part of the Budapest-Belgrade Railway, which China wanted to use as a showcase for its railway technology in Europe (before, as Andreea Brînză outlined for The Diplomat, the project “got stuck in red tape, negotiations, and corruption”).

Enjoying this article? Click here to subscribe for full access. Just $5 a month.

Clearly, with CCCC’s global presence, deterring other countries from doing business with it will be a tall order. But given the Trump administration’s clear preference for using sanctions on individual Chinese firms to achieve larger strategic ends in the U.S.-China competition, it’s well worth watching to see what other CCCC subsidiaries might wind up on the Entity List in the future


Popular posts from this blog

SSG Commando Muddassir Iqbal of Pakistan Army

“ Commando Muddassir Iqbal was part of the team who conducted Army Public School operation on 16 December 2014. In this video he reveals that he along with other commandos was ordered to kill the innocent children inside school, when asked why should they kill children after killing all the terrorist he was told that it would be a chance to defame Taliban and get nation on the side. He and all other commandos killed children and later Taliban was blamed. Muddassir Iqbal has deserted the military and now he is  with mujahedeen somewhere in AF PAK border area” For authenticity of  this tape journalists can easy reach to his home town to interview his family members or   ISPR as he reveals his army service number” Asalam o Alaikum: My name is Muddassir Iqbal. My father’s name is Naimat Ali. I belong to Sialkot divison (Punjab province), my village is Shamsher Poor and district, tehsil and post office  Narowal. Unfortunately I was working in Pakistan army. I feel embarrassed to tell yo

CPEC Jobs in Pakistan, salary details

JOBS...نوکریاں چائنہ کمپنی میں Please help the deserving persons... Salary: Salary package in China–Pakistan Economic Corridor (CPEC) in these 300,000 jobs shall be on daily wages. The details of the daily wages are as follows; Welder: Rs. 1,700 daily Heavy Duty Driver: Rs. 1,700 daily Mason: Rs. 1,500 daily Helper: Rs. 850 daily Electrician: Rs. 1,700 daily Surveyor: Rs. 2,500 daily Security Guard: Rs. 1,600 daily Bulldozer operator: Rs. 2,200 daily Concrete mixer machine operator: Rs. 2,000 daily Roller operator: Rs. 2,000 daily Steel fixer: Rs. 2,200 daily Iron Shuttering fixer: Rs. 1,800 daily Account clerk: Rs. 2,200 daily Carpenter: Rs. 1,700 daily Light duty driver: Rs. 1,700 daily Labour: Rs. 900 daily Para Engine mechanic: Rs. 1,700 daily Pipe fitter: Rs. 1,700 daily Storekeeper: Rs. 1,700 daily Office boy: Rs. 1,200 daily Excavator operator: Rs. 2,200 daily Shovel operator: Rs. 2,200 daily Computer operator: Rs. 2,200 daily Security Supervisor: Rs.

A ‘European Silk Road’

publication_icon Philipp Heimberger ,  Mario Holzner and Artem Kochnev wiiw Research Report No. 430, August 2018  43 pages including 10 Tables and 17 Figures FREE DOWNLOAD The German version can be found  here . In this study we argue for a ‘Big Push’ in infrastructure investments in greater Europe. We propose the building of a European Silk Road, which connects the industrial centres in the west with the populous, but less developed regions in the east of the continent and thereby is meant to generate more growth and employment in the short term as well as in the medium and long term. After its completion, the European Silk Road would extend overland around 11,000 kilometres on a northern route from Lisbon to Uralsk on the Russian-Kazakh border and on a southern route from Milan to Volgograd and Baku. Central parts are the route from Lyon to Moscow in the north and from Milan to Constanţa in the south. The southern route would link Central Europe with the Black Sea area and