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All Roads Lead to Beijing

Chinese infrastructure policy and its Western thinkers

The Emperor’s New Road: China and the Project of the Century by Jonathan E. Hillman. Yale University Press, 304 pages.

Chi-nah, the easiest and most economical Trump impersonation, hitting each syllable hard, flopping a hand forwards, a moment’s pause. The most topical too, maybe. All we do as a country is lose, he told us, right as the golden escalator ride kicked off his 2016 campaign. They’re killing us, the People’s Republic. Trump’s presidential pitch? “I beat China all the time.”

Hillary Clinton probably wouldn’t have described China-United States trade relations as “rape” or “the greatest theft in the history of the world,” as Trump did during his campaign, nor would she have necessarily imposed tariffs on hundreds of billions of dollars of Chinese products, as he did once in power. She might not have imposed sanctions on Chinese companies or written an executive order barring Americans from investing in Chinese companies with military ties. She had already begun gearing up to be the first properly Sino-American president as far back as 2011, however, announcing “America’s Pacific Century” in Foreign Policy. The United States needed “to accelerate efforts to pivot to new global realities,” the secretary of state wrote, as we supposedly wound down our military presence in the Middle East. The 2010s would be about opening Asian markets, especially those peskily protected Chinese ones, while “maintaining peace and security” by running freedom of navigation operations with missile destroyers through the South China Sea. Even if American hegemony needed shoring up against China’s rise, we were most certainly not losing, Clinton insisted, in a proto-Trumpian flourish:

I hear everywhere I go that the world still looks to the United States for leadership. Our military is by far the strongest, and our economy is by far the largest in the world. Our workers are the most productive. Our universities are renowned the world over. So there should be no doubt that America has the capacity to secure and sustain our global leadership in this century as we did in the last. 

Clinton was attempting to redeem the narrative that Washington had told itself for decades about China. Starting with Nixon’s trip eastward, and culminating in the PRC’s 2001 entry into the World Trade Organization, American policymakers had cheered on the newly minted great power’s success, as if it vindicated the American-led international system. As an excited then-senator Joe Biden said after a trip to the PRC that year, “Great powers adhere to international norms in the areas of nonproliferation, human rights, and trade.”

Washington has a single, hawkish party when it comes to China.

The bipartisan gamble on China would prove a miscalculation. It had been foolish to assume that the PRC was simply capitulating like other Cold War foes to the international Weltgeist, per Fukuyama’s bad impression of Hegel. The Chinese regime’s capacity to retain economic sovereignty in the face of international pressure was unforeseen, as was its willingness to provide extensive state support to homegrown industry. By the 2010s, when Clinton set out to pivot east, Washington had begun to see its teleological hubris. It now faced Xi Jinping’s “Chinese Dream” of unfettered technocratic state intervention delivering population-wide domestic material progress: “the most spectacular Keynesian promise ever made,” as Adam Tooze describes it. Xi’s is the sort of dream that might lead a country coming off of three improbable decades of nearly ten percent annual GDP growth to assert itself more forcefully on the world stage.

Now Washington has a single, hawkish party when it comes to China. The Democrats have scrambled to match Trump’s bluster, though they’ve shorn it of the melancholic affection he paid Xi of late. (“I had a very, very good relationship, and I haven’t spoken to him in a long time.”) Whether because of IP theft or human rights violations, it’s time to get tough, especially on a “thug” like Xi without a “democratic—with a small d—bone in his body,” as Biden said in a primary debate last February. (This anticipated the tone of the final presidential debate, where the moderator asked Biden, “If you were president, would you make China pay? And please be specific, what would that look like?”) In the GOP, “China Virus”-inflected Sinophobia continues apace, Ted Cruz having recently declared China “the single greatest geopolitical threat facing the United States” while grilling Biden’s nominee for U.N. ambassador. Meanwhile Kissinger croaks on about our being in the foothills of a new Cold War, even on the brink of a WWI-sized catastrophe.

Promising trade partner no longer, China is now an opaque and menacing threat, rife with currency hoarding and technology pilfering, job stealers and virus creators and unnatural state-owned enterprises (SOEs) secretly practicing an arcane “civil military fusion” at behest of the state. (Never mind In-Q-Tel—the CIA-funded venture capital firm investing in various information and surveillance technologies—or much of Silicon Valley). What’s worse, this great power is doing great power things: dredging artificial islands in the South China Sea, financing Ecuadorean office buildings and dams in exchange for oil, and dominating telecommunications across Africa, Western allegations about Huawei be damned. We are no longer winning, goes the new Washington consensus. Forget America’s Pacific Century: Can we stop one hundred years of global China?

Mercator Institute for China Studies

The twenty-first century is a fifth over, and China has encouraged itself to “go out.” Following Mao’s death in 1976, the Communist Party carefully embarked on market reforms, bringing the country out of extreme poverty within two decades; Deng Xiaoping described the Party’s cautious approach to state-led capitalism as “crossing the river by feeling the stones.” After such relatively prudent internal development, China quickly began to establish itself on the international scene, abetted by the 2001 entry into the WTO. Export surges caused sudden “China shocks” in Europe and the United States, where manufacturers failed to withstand Chinese competition. Meanwhile, China ramped up foreign direct investment. Its outward flows have risen from tens of billions in the 2000s to hundreds of billions in the 2010s. China’s banks have been busy lending, its companies frenetically building, its exports surging, etc.

What does global China look like today? The answer differs of course from Dayton to Blagoveshchensk to Taipei. Of late, the country has ostensibly simplified the picture, gathering (and accelerating dramatically) its efforts in some 130 nations under the aegis of the Belt and Road Initiative, which was launched in 2013 and originally named the One Belt One Road Initiative. The initiative’s publicly stated goals are both incredibly ambitious and maddeningly indistinct: aiming, for instance, to “set up all-dimensional, multitiered and composite connectivity networks.” Its purview is accordingly broad, covering everything from finance policy to energy pipeline building to cultural soft power, or what Xi terms “people-to-people connectivity.”

In its ambition and opacity, the BRI has become an inkblot test for those attempting to define the Sino-century. A gift horse meeting investment needs in partner countries where few others have stepped in, it is also an opportunity for organizations like the World Bank and the WTO to hitch themselves to China’s explosive growth. Banks see a cash cow, assembling BRI teams to work both sides of various geopolitical equations. Grifters spot a remarkable opportunity in the infamously corrupt sectors of construction, transportation, and extraction. To its critics, the BRI has become a euphemism for imperialism, making for odd decolonial bedfellows, with both Clinton and former Attorney General William Barr warning of China’s “new” and “modern-day” colonialism, respectively.

Grift or gift, the BRI is primarily an infrastructural affair, simultaneously “the carrot for convincing countries to participate, the spoils for China’s national champions, and the source of the West’s greatest anxieties,” as Jonathan E. Hillman writes in The Emperor’s New Road. China has promised $1 trillion in foreign infrastructure investment in total via the BRI, which, adjusted for inflation, would be seven times what the United States spent on the Marshall Plan, and five times what Trump’s administration proposed and failed to persuade Congress to fund on infrastructure domestically. (“The contrast is striking,” Hillman writes, sounding the dour note of American loserdom. “The world’s leading power no longer leads, while its rising power charts a course to the center of everything.”) Hundreds of billions have already been spent on BRI projects, the largest some $60 billion for the China­-Pakistan Economic Corridor, a collection of projects connecting China to Pakistan’s Gwadar Port on the Arabian Sea. Admittedly, such figures are attained with some difficulty. There are no official maps or lists of BRI endeavors, nor any official definition for what qualifies as a BRI project. Chinese-funded efforts in nonparticipant countries share many of the same characteristics; projects started years before the initiative’s 2013 launch are now counted among its numbers. Foreign analysts heed Chinese media publications that may leave smaller projects unlisted while their databases measure loans but leave projects funded privately uncounted.

Hillman presents himself as a modern Pekingologist who, tired of BRI hearsay, has decided to go Wonks without Borders.

A senior fellow at the old Kissinger stomping ground, the Center for Strategic and International Studies, Hillman presents himself as a modern Pekingologist who, tired of BRI hearsay, has decided to go Wonks without Borders. The Emperor’s New Road begins with Hillman dropping by the 2017 BRI forum “out of curiosity,” as if he hadn’t served as a policy advisor at the Office of the U.S. Trade Representative or contributed to the U.S. National Security Strategy and the President’s Trade Agenda in 2015, let alone worked at CSIS. He then ditches the lanyard cosmopolitanism for the drudgery of visa checks and hard hat tours in an attempt to provide a “middle view” between “high-level views of China’s foreign activities and the messier reality on the ground.” He embarks on sixteen countries worth of deepwater port and train yard fieldwork, traveling by rail from China’s western borders through Central Asia all the way to Budapest, and overseas from South and Southeast Asia before ending in East Africa.

China’s land aspirations run through Central Asia. Hillman accordingly begins his journey bribing Kazakh police on his way to the Khorgos Gateway, a cutting-edge industrial zone and logistics hub in operation since 2015. The Gateway was promoted as a “New Dubai” that would create some fifty thousand jobs by 2020; it is central to Kazakhstan’s dreams of becoming the “buckle” in China’s Belt. It has created far fewer jobs than promised, however, and today handles less cargo than most other such facilities straddling the Chinese-Kazakh border.

Surveying empty facilities, Hillman remains skeptical of a revivified Silk Road running through Central Asia. In his opinion, China is taking a risky gamble on overland trade, which remains more expensive and slower than its maritime equivalent. (Less than one percent of trade by volume between China and Europe was by train in 2016; ninety-four percent by weight and two thirds by value of trade was via maritime means.) The gamble has yet to pay off, and backlash is mounting against corruption. Citizens in the region are not unaware that the Chinese Development Bank, which is financing highways in the regions, has allegedly funneled millions of dollars to the Tajik president’s son-in-law, or that Kyrgyzstani elites have inflated cement prices to give themselves kickbacks. Unlike the United States, which usually demands government and market reforms, Beijing offers funding with fewer strings attached, allowing Chinese companies to pursue a nakedly transactional agenda abroad. While Chinese companies are not alone in peddling influence, Hillman claims that Western countries are more vigilant in policing their businesses.

China’s largest portfolio of promised investments is centered on the China-Pakistan Economic Corridor, which includes a superlatively long and high (and expensive) pipeline across the treacherous Karakoram mountains and yet another “next Dubai” in the Gwadar port. It is largely disconnected from the rest of Pakistan and lies relatively unused, dreams of an Emirati-style luxury trap having failed to materialize. Gwadar now seems to mainly agitate China watchers, who are anxious that the PRC is converting commercial ports into naval bases. Such incursions are often denounced by the very politicians actively dealing with China. For example, Malaysian politician Mahathir Mohamad rode into his second prime ministership in 2018 invoking the Chinese threat to his nation’s sovereignty. “They are more powerful, and we cannot fight them,” Mohamad told CNN after he won. “How do we benefit from their wealth and their power?”

He appeared at the following year’s BRI forum, clarifying that “the Belt and Road idea is great,” and then renegotiated several multibillion dollar projects to shift operational risk back toward China. “The cycle of opposition, negotiation, and deal making will continue in Southeast Asia and beyond,” Hillman writes:

Candidates rail against China when it helps their case for office. After they take office, however, their options for undoing existing projects are limited, as are their options for attracting new foreign investment. They are as eager as their predecessors were to announce deals, but they need to look tough and keep their promises for scrutinizing past deals. So they threaten to cancel projects, China comes to the negotiating table, and the incentives on both sides encourage salvaging deals and saving face.

This cycle of renegotiation is lost on most China watchers, who tend to favor the mythically pernicious “debt diplomacy,” portrayed in a 2018 speech by Vice President Pence as a coordinated attack against naïve countries. Oft-mentioned is Sri Lanka’s Hambantota Port, which was largely developed over the past decade on Chinese loans offered at rates higher and for periods shorter than the multilateral standard. In return for approximately $1 billion in relief for Sri Lanka’s debt, which tripled in the early 2010s, the port’s controlling stake and a ninety-nine-year lease was granted to a dreaded Chinese SOE. For all that, it has been a commercial disaster, with thirty-million-a-pop shipping cranes handling less than one percent of Sri Lanka’s total traffic.

China already resembles the world’s major creditors now.

What the Penceian narrative omits is how Sri Lanka’s politicians themselves drove construction, particularly Hambantota’s own Mahinda Rajapaksa, who had long promised to bring shipping to his hometown. “Ideas for mega projects come and go, but they rarely die,” Hillman quips, though “every big project needs a strong political patron.” Rajapaksa was happy to oblige when he capitalized on the 2004 tsunami and the entrenched civil war in the country’s north to cinch the 2005 election, declaring he was going to bring an “honorable peace” and build a new Sri Lanka. India and the Asian Development Bank both declined to fund his long-standing dream, leaving China to step in.

Hillman is unconvinced by talk of debt-trap diplomacy, which he thinks masks a more banal reality. Eager to gin up business for their compatriots, Chinese officials approve loans for projects without due diligence; Chinese firms are eager to get paid despite questionable long-term commercial viability for the projects they undertake; and foreign officials are usually happy to reap immediate political and financial benefits whether or not a coherent development plan exists. “Foreign-policy experts occasionally see strategy where it does not exist,” Hillman writes, “viewing their competitors’ actions as more coordinated than they are in reality. The trope is that China is masterfully planning for decades, if not centuries, while Western politicians are struggling to survive tomorrow and next week.”

The corollary is that China wins even when these projects fail, which is also untrue, as Hillman has to point out. Powerful as it may be, the PRC is vulnerable to missteps and criticism, just like any other major international player. Facing global backlash over the nebulous “project of the century,” Xi dropped the lofty phrase from his speech at the 2019 BRI forum in favor of a global managerialese, emphasizing keywords like “priorities” and “execution.” Linguistic modesty has been matched financially, with new research showing that China’s two largest policy banks reduced overseas lending from $75 billion in 2016 to $3.9 billion in 2019.

Growing pains, possibly. If China wants to be a great power, Hillman argues, it has to play by the same rules and allow for greater international oversight and regulation. “The world’s major creditors did not bind themselves out of philanthropy but out of self-interest, after suffering the reputational and financial consequences of going it alone.” This bit of realpolitik sounds plausible enough, though Hillman seems to presume that the American Weltgeist can still resubsume the errant emperor, President Biden able to c’mon man now-global China into some semblance, however sundowned, of how he thought things would stand back in 2001.

The Gwadar East-Bay Expressway. | Belt and Road Initiative

China already resembles the world’s major creditors now, though. Regardless of the nominally communist party running it, the fastest growing major economy in the world has the familiarly dismal contrasts of its Paris Club competitors. With millions laid off from the state sector, the “iron rice bowl” of lifetime employment and benefits has been broken. A massive class of migrant workers pursues work opportunities in urban centers under incredible hardship, forsaking hometown-based state safety nets that were increasingly inadequate in any case. Meanwhile, China now has the most billionaires out of any country, according to the 2020 Hurun Rich List, and has been predicted (pre-Covid, at least) to mint millionaires at three times the U.S. rate over the next few years. Its wealth distribution increasingly resembles the United States’ hellish disparities. No wonder the country has turned outwards, the Chinese state attempting, as Ching Kwan Lee writes in her 2017 book The Specter of Global China, “to resolve a set of intertwined economic and political problems—excess capacity, resource security, falling profit rates, and potential social instability arising from a faltering economy.”

You might reach for your Lenin. Hillman himself punts on theory, citing the Oxford dictionary definition of empire: “the extension and maintenance of a country’s power or influence through trade, diplomacy, military or cultural dominance, etc.” Tellingly, his ethnographies end in Africa, where China’s ambitions go beyond infrastructure. The continent’s natural resources beckon a comparatively impoverished industrial powerhouse, as do prospects of future markets for export, while an aging West buries its economies under debt. As Europe and North America debate whether to let in Chinese tech, Chinese firms are already serving Africa’s internet market, the fastest growing in the world. It was in Djibouti, not Sri Lanka, where China built its first overseas naval base.

As BRI unrest arises, China seems to be looking for help from an emblematically American imperial figure.

Clintonian or otherwise, tidings of a new variant of colonialism ring a bit hollow, as Lee argues in The Global Specter of China. She presents an ethnography of Chinese mining concerns—both state-owned and private—in copper-dependent Zambia, which nationalized its mines only to privatize them again in the 1990s as the country struggled with decades of post-independence disenfranchisement of labor and liberalization at World Bank loan-point. Lee is neither booster nor tankie; she was recently threatened by pro-Beijing newspapers with Hong Kong’s national security laws for making purportedly “pro-independence” statements. Still, she remains skeptical of Sino-African colonial talk. Per Lee, “there is no military occupation by China in Africa, no chartered companies with exclusive or sovereign trading rights, no religious proselytizing”—no evidence, in short, of “all the things that typically accompanied colonialism over the past century or two.” In June 2011, at the start of a five-day tour of the continent, Secretary Clinton had warned in a Lusaka television studio of the Chinese copying earlier colonists, for whom “it was easy to come in, take natural resources, pay off leaders, and leave.” Lee’s research finds that Chinese state capital’s imperatives actually tend toward accessing raw materials and establishing stable political ties, which makes it more willing to negotiate with African states and labor forces and even concede to their commands. (In June, China announced a debt-relief scheme for many of its BRI partners struggling with the coronavirus, largely consisting of those in Africa.)

None of this is to declare China’s innocence. Lee is simply warning “against the facile resort to sweeping and grandiose generalization in terms of hegemony, empire, and neocolonialism.” State-owned or not, Chinese capital is, well, capital, neither unnaturally malicious nor unusually benign. Where capital goes conflict goes, per labor scholar Beverly Silver’s maxim. And so it has been: in 2016 a Kenyan construction site was stormed by workers who left fourteen Chinese staff wounded, enraged by a purported lack of jobs; the signing of Hambantota’s ninety-nine-year Chinese lease set off violent clashes in 2017 between the police and Sri Lankans who feared being evicted from surrounding land; the following year mass demonstrations erupted throughout Vietnam against prospected Chinese investment-friendly special economic zones, and protestors even stormed a government building near Ho Chi Minh City.

As BRI unrest arises, China seems to be looking for help from an emblematically American imperial figure. In 2014, Trump “shadow advisor” and Blackwater founder Erik Prince became chairman of Frontier Services Group, a Hong Kong-based security and logistics company whose largest stakeholder is the Chinese state-owned conglomerate CITIC. FSG now protects Chinese-funded natural gas pipelines in Nigeria, provides protection for Bank of China cash escorts in Cambodia, and is building “a training center” in a Xinjiang, under heavy international scrutiny. It seems to have captured BRI’s security needs around the world. One suspects that global China will win any such conflict as the United States increasingly has. Its mercenaries will likely operate with worrying impunity, and might even being pardoned by the outgoing emperor after being convicted for something like, say, killing seventeen and wounding twenty-four Iraqi civilians in Nisour Square.