New research suggests China’s port investments as part of the Belt and Road Initiative are aimed at generating political influence and military presence in the Indo-Pacific.
New Delhi: Launched in 2013, China’s ambitious Belt and Road Initiative (BRI) has been pegged as a trade masterstroke meant to recreate the ancient Silk Road, facilitating development along the way in a win-win situation.
But new research suggests a clear political agenda behind the initiative, aided by the exercise of ‘corporate obfuscation’ by the Chinese companies involved.
In a report by Washington-based nonprofit research group C4ADS, titled ‘Harboured Ambitions: How China’s port investments are strategically reshaping the Indo-Pacific’, China analysts Devin Thorne and Ben Spevack noted, “Questions surrounding China’s intentions plague the BRI”.
Beijing, they said, is “moulding the Indo-Pacific to ensure its national security interests are adequately protected”. It appears to be creating a strategic atmosphere, they added, that generates political influence for Beijing and aids the expansion of its military presence in the Indo-Pacific.
Investing in infrastructure and beyond
The report was based on a framework derived from six parameters — location, development model, Communist Party presence, financial control, transparency and profitability. Through this framework, the authors sought to gauge Chinese strategic control in areas where they are building ports under the BRI by analysing three case studies: Gwadar in Pakistan, Hambantota in Sri Lanka, and Koh Kong in Cambodia.
Quoting unofficial Chinese reports, the authors said the ports were chosen to build political influence and create “strategic support states”. They are reportedly intended to be the focal points of a strong Chinese footprint in the Indo-Pacific.
The authors said the performance of these Chinese-funded ports and the “opaque behaviour of Chinese firms” showed they were serving the country’s own interests, as they “manifest latent indicators of ulterior motives”.
The report speaks about Islamabad’s “security dilemmas and sunk costs” and adds that the Chinese personnel on the ground “are drawing Beijing deeper into Pakistan’s internal security concerns”.
It is no secret that Chinese influence in Pakistan is incredibly strong, with the power dynamic in Pakistan heavily skewed towards China.
The China-Pakistan Economic Corridor (CPEC) cemented Chinese intentions for Pakistan. Envisioned as a model manifestation of the BRI, the corridor will be a network of highways, oil pipelines, energy projects and industrial grids. Its cost, around $62 billion, will be borne by China.
A part of CPEC, the Gwadar Port is underdeveloped and unprofitable even though it is a decade old.
It is widely perceived as a foot-in-the-door for China to build a substantial military presence in Pakistan. Unverified reports suggest China is building a permanent air and naval base in Pakistan, near Gwadar. Beijing is also in the process of increasing its marine corps strength from 20,000 to 1,00,00 troops, reportedly for deployment at Gwadar and Djibouti. This, despite China’s official denial of any “military intentions” behind CPEC.
Figures on how CPEC will boost Pakistan’s economic growth are unreliable, as few credible studies exist. The majority of Chinese financing is through loans, and if they aren’t repaid, Pakistan is likely to be “indebted to China as never before”. In fact, the governor of the State Bank of Pakistan governor has gone on record to say the CPEC needed to be more transparent.
The projects aren’t employing local Pakistanis either — instead, the number of Chinese workers in Pakistan is reportedly increasing.
The Hambantota Port is barely used. Like Pakistan, Sri Lanka owes China a heavy debt. Unable to repay the loans, last year, Colombo was forced to give Beijing a 99-year lease to the strategic port for debt relief. The Chinese government forgave a portion of the debt in exchange for equity in the Hambantota Port.
China, thus, earned substantial financial leverage over Sri Lanka.
According to the C4ADS report, Beijing began actively cultivating its relationship with Sri Lanka in 2005. Between then and 2014, it added, China provided nearly $7 billion in loans to Sri Lanka, and the ventures they were funding have been described as “vanity projects” that don’t really boost the economy. Also, several agreements involving Chinese projects in the country have reportedly been “revised” to favour China.
Ultimately, this debt brought down the Rajapaksa administration. In 2015, Maithripala Sirisena became President after “campaigning on a platform of rebalancing Sri Lanka away from China and towards India and the West”.
Sirisena did suspend projects, but foreign-owned debt continued to mount, totalling over $60 billion in 2016. The Sirisena administration, therefore, began to re-engage China.
Just the beginning?
Ports are only one dimension of the BRI. According to the authors of the report, the parameters employed for the report can be “adapted and applied to Chinese-funded projects around the world”.
For example, in 2016, the state-owned China Ocean Shipping Company acquired a majority stake in a Greek port, giving China a foothold in Europe. Similarly, a satellite observatory base operated by China will soon be functional in Argentina.
“If states do not heed the lessons of the Indo-Pacific, China will continue to pursue a security strategy that utilises infrastructure investments to generate political influence, stealthily expand Beijing’s military presence, and create an advantageous strategic environment,” the report concluded.