12 Special reportChina’s Belt and Road The EconomistFebruary 8th 2020
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canbefoundat:Economist.com/specialreports2 pen with complementary reforms that increase transparency, cut
hassles at borders, face up to environmental and social conse-
quences, and ease labour mobility. As it is, in some countries, like
Mongolia, the costs of new infrastructure outweigh the gains.
The final bucket holds those aspects of the initiative that osten-
sibly promote greater openness and global interconnectedness.
They include much of the bri’s digital strategy. But all the high-
level and “people to people” diplomacy is key for China’s leaders
too. It is here that the paradox is starkest. At home, the Communist
Party monopolises the political space, prevents debate and en-
forces an information autarky. Abroad, its obsessive attempts to
stifle critics suggest limits to the openness it will tolerate. That un-
dermines the bri’s attractions. One development economist from
Ethiopia says that its training courses on Chinese campuses to
which many foreigners are invited are stifling and dogmatic.
These flaws are baked into the belt and road. But they do not
mean that the project of the century is heading for the buffers. The
goodies China offers reflect well on leaders. And Chinese con-
struction companies and workers get stuff done. Even politicians
who, in opposition, make much of China’s rapaciousness usually
come round once in power. In Malaysia, the threat by the prime
minister, Mahathir Mohamad, to spike $20bn-worth of rail and
other projects turned out to be a negotiating ploy.
What is more, China is unquestionably now the dominant Eur-
asian force, and a canny one at that. One instance is its dealings
with Russia, another Eurasian former empire with aspirations to
greatness again. In 2015 Russia formed the Eurasian Economic Un-
ion (eaeu) with former Soviet states of Central Asia, the better to
draw them close and stipulate economic terms. But after facing
censure from the West over its annexation of Crimea, Russia need-
ed China for economic and diplomatic support. China has since
co-opted the eaeufor its own purposes. The union’s common cus-
toms zone from Kazakhstan to Belarus makes it much easier to get
cargoes to Europe—bypassing much of Russia altogether. This isjust one example of how things are tipping in China’s favour.
Yet one thing is glaringly absent in China’s attempts to bend the
world to its will. The last time countries circled in China-centred
orbits, before the 19th century, China’s moral and cultural author-
ity played as big a part as its sheer size. Japan, Korea and Vietnam
all used Chinese characters in their writing systems and organised
their societies according to Confucian precepts. Today, China
lacks moral or cultural appeal. Its attraction is its cold, hard cash.Not yet Pax Sinica
It is in this context that America has been grappling for a response.
Three years ago the Trump administration made a first attempt: a
“Free and Open Indo-Pacific”, in conjunction with Japan, Australia
and India. It emphasised a strong naval dimension. But with no de-
velopment dimension, and a sense of sharpening big-power rival-
ry, the region has been reluctant to embrace it.
Now the West is offering developing countries alternatives that
emphasise transparency, debt sustainability, environmental safe-
guards and solid social and economic returns. America has set up
the new usInternational Development Finance Corporation. Its
available money is a fraction of what China can offer. But its
strength may prove to be in involving private capital in projects.
Meanwhile, in late 2018, Australia launched its Infrastructure Fi-
nancing Facility for the Pacific, worth A$2bn ($1.4bn) in loans and
grants. And in September Japan and the eusigned a wide-ranging
deal for joint infrastructure projects, setting clear standards for in-
vestments ranging from transport to digital industries.
Such ventures may start to make a mark in the next year or two.
Meanwhile, democratic countries are quietly finding other ways to
push back against China. Japan has long been active in South-East
Asia and its ties with India have grown. Chinese plans for a port in
Bangladesh were shunted aside by offers from India and Japan. In-
dia has also come to the aid of the tiny Maldives, whose previous
repressive government racked up debts with China. Pakistani offi-
cials, burned by their experience with cpec, now stress how much
they welcome American development initiatives. Even the Raja-
paksas in Sri Lanka suggest they will be more careful to cultivate
India in future.
Countries’ leaders say they welcome having more options.
They do not relish being forced to choose between the historical
global power and the ascendant one. That is why they worry about
the growing American and Chinese rivalry over telecoms and cy-
berspace. America should be careful not to hasten a situation in
which countries fall on one or other side of a digital iron curtain—
with rich, open societies taking their tech from American, Euro-
pean and Japanese suppliers, while poorer, less democratic ones
take theirs—and their political direction—from China. Then Chi-
nese leaders would indeed have their new order. They would sit
again at the heart of a China-centred world, an echo of the tributary
relationships of old. But it will be a hard-edged cosmos and it will
not be one in which its citizens have chosen to live. 7