Bumps and potholes on China’s Modern Silk Road

In 2013, President Xi Jin Ping proposed for the establishment of a comprehensive economic project that would cover large parts of the globe stretching from China all the way to Africa and Europe. This has since then become known as the One Belt One Road Initiative or OBOR for short. The undertaking not only sees the construction of massive infrastructure projects in identified areas to facilitate commerce and economic growth for many countries, but also purportedly the creation of supporting business ventures that would provide employment to people who live in developing countries.

In October 2015, this was further refined by the announcement of an action plan that outlined what has been called the Silk Road Economic Belt and the 21^st Century Maritime Silk Road. The Silk Road Economic Belt is envisioned as three routes connecting China to Europe (via Central Asia), the Persian Gulf, the Mediterranean (through West Asia), and the Indian Ocean (via South Asia). The 21^st Century Maritime Silk Road is planned to create connections among regional waterways. The use of the term Silk Road is a takeaway from the silk trade route that carried much of Imperial China’s trade with the rest of the known world during ancient times.

During the recently concluded 19^th National Party Congress, Xi again stated the importance of OBOR with regards to providing economic growth in nations that would benefit from this initiative.

At the same time, the expansion of OBOR to cover places like Africa and even Latin America is being seriously studied. The successes of these planned and ongoing projects would catapult China into a preeminent presence in the international community.

However, for that to be effectively realized by Beijing, there needs to be a number of things that should be taken into consideration:

• A large number of nations identified in the OBOR initiatives are in the developing category and thus have problems peculiar to such types of countries. These may range from perennial political instability, unchecked corruption, widespread rebellion, large-scale terrorism and even susceptibility to natural disasters. Some of these nations might become black holes for financial assistance or already are as seen by the continued lack of development and having large foreign debt payments. This is especially relevant given the position by China that OBOR initiatives should be a bilateral and multilateral collaborative process with counterpart countries and not a unilateral Beijing initiative which reveals Beijing’s financial limitations.

• China is relatively new in the field of providing international financial assistance and incentives as compared to Japan, the European Union (EU) and the United States (US). Japan, the EU, and the US have managed to institutionalize their foreign assistance and have numerous safeguards that ensure assistance provided should be used properly. If there are no safeguards, then these countries will not provide assistance.

Beijing’s “China Solution” as an alternative to the Western manner of assistance may look appealing but oversimplifies everything especially in the matter of human rights. The reason why Western governments insist on human rights as a precondition to financial assistance is also linked to accountability in matters of the recipient government’s capacity to use funds properly. An autocratic government tends to be very corrupt and assistance provided becomes sucked into a bottomless pit of corruption with no tangible returns except for the continuation of political, economic, and social instability. An unstable country will not prosper and in fact become a dependent client state to the financial detriment of donor countries.

• As an example, the defunct Soviet Union had undertaken an overly ambitious program to assist its allies not just economically but also militarily as well. That was also coupled with a massive military program to make the USSR match the North Atlantic Treaty Organization. The outcome was that Moscow could not sustain the effort and it eventually collapsed under the weight of excessively dependent client states and a moribund economy. Even today, The Russian Federation has not totally recovered from the misadventure of the USSR as seen by its many economic problems and internal issues. This should serve as a valuable lesson for China as it plots the direction of OBOR.

There are a myriad of features and peculiarities in regions that are covered by OBOR initiatives. Strategies that may be relevant for one nation may be useless in another due to the nature of problems affecting the recipient nation. The question remains if China has the ability to adapt to developments that may result not just from political issues but also by forces of nature. This is because in many developing nations, natural disasters may cause further political instability and spark unforeseen changes in the security environment.

Furthermore, as Beijing engages governments around the world with high levels of corruption, it runs the risk that close association with them may spillover directly into China and instigate corrupt practices within the Chinese government and private sector to unacceptable levels. China’s spectacular growth that has surpassed Japan as an economic powerhouse, must not blind Beijing as it challenges the current global preeminence of the United States. China must try to avoid becoming a victim of its own hubris.

Jose Antonio Custodio is a Non-Resident Security Fellow, Stratbase ADR Institute.