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Written by: William Ging Wee Dere

Part 1: What is the Belt and Road Initiative?

Internationalism in flux

The West used colonialism and imperialism in the past few centuries as its form of Internationalism - to divide the world into spheres of control through conquest. It’s about how Western imperial powers interact with, extract from, and commodify the rest of the world/Global South. China’s idea is the Marxist-Leninist concept of “proletarian internationalism” where people of the world stand in solidarity to achieve independence, peace, justice and global prosperity.

Since WWII, the US has replaced European powers as the global hegemon, as China strived to recover and rebuild from the century of humiliation, and this has been the world order for all of our living memory. The 2008 financial crisis was an inflection point for the past decades’ changes.

The 2008 capitalist financial crisis was a jarring event for the West. It was a reminder how precarious the state of the capitalist world was. However, if nothing, capitalism has a dynamism that allows it to react to events. One of these events is the rise of China, who emerged relatively unscathed from the financial crisis. In fact, China acted as the “shock absorber” to stabilize the world economy during the crisis by allowing the Yuan to appreciate at some internal cost to itself.

China in context

In the previous two decades, the Western capitalist countries engaged with China to reap large profits and worked to change Chinese society to a more acceptable Western style of democracy and governance. However, China had its own developmental plan to deal with all the internal contradictions that plagued Chinese society – the foremost was the alleviation of poverty for its people.

Through the industriousness of its workforce, the Chinese government made large investments using foreign and internal reserves to grow the economy and accumulate capital. China became the “factory of the world” and exported its manufactured goods to feed the growing demands of the West with cheap, high quality consumer products. Through its socialist economic planning and the Five-Year plans, China was able to use its accumulated capital to develop its infrastructure to meet the material and cultural needs of its people. In 40 years, 800 million Chinese were lifted out of poverty, a feat unprecedented in history.

According to the World Bank and cited by Izak Novàk’s article, The War on China, the Chinese life expectancy nearly doubled from 43.7 in 1960 to 76.7 in 2018; adult literacy rose from 65% in 1982 to 96% in 2018; and the average yearly salary has grown 14 times from 4,348 Yuan in 1995 to 74,318 Yuan in 2017. Some people will say that the Chinese government achieved all this at the expense of the environment. The facts show that China is by far the world’s leader in renewable energy with over 788,000 MW of total installed capacity in 2019. The US only has one third of this capacity. The Chinese government planned these energy policies with State-Owned Enterprises (SOE) dominating the sector, where renewable electrical production (non-hydro) increased 9,054% from 3.1 billion KWHs in 2000 to 283.8 bn KWHs in 2015.

As the 21st century progresses, the Chinese government has planned for change. The economy pivoted from accumulation to consumption. With the five-year plans starting in 2012, a big push was made to develop the people’s livelihood with an average increase of 10% per year in wages and 36 million new affordable housing for low-income people. 38,000 km of high-speed rail (HSR) systems were constructed throughout the country, now comprising two-third of the world’s HSR. Moving from being the “world’s factory” into high technology, China became the world leader in clean energy, telecommunications research and development in high-end manufacturing and in the service sectors.

It is little wonder that Harvard’s Ash Center 13-year survey found 95.5% of the Chinese population are satisfied with their government compared with 38% of Americans being satisfied with their government.

China containment strategy

China’s emergence as a leading economy forced the US to re-think its hegemonic strategy. In 2011, President Barack Obama unveiled the Pivot to Asia – China Containment Policy. The China Containment strategy is basically a military one. Sixty percent of the US naval fleet is now stationed in the Pacific. The US has 132,000 troops in the Indo-Pacific region with a six-year plan (2022-2027) to spend $27.4 billion to establish missile stations in Pacific island chains within striking distance of China. It is building up a military alliance similar to NATO in the QUAD, composed of the US, Australia, Japan and India.

With 800 military bases in 80 countries, the US flexes its might to intimidate and bully. It has a large military presence in Australia, South Korea, The Philippines, and Japan, as well as the military occupation of Afghanistan in an effort to surround China. These are the external containment strategies surrounding the country. The US is also working to destabilize China internally by promoting and financing separatist movements in Xinjiang, Tibet and Hong Kong.

In response to the US military provocation, China builds up its military presence in the atolls and built-up islands in the South and East China Seas to establish its sovereignty in these areas and as defense against US incursions.

However, China’s primary approach to progress and to break the US military encirclement remains one of infrastructure and economic development. In 2013, China sees multilateralism and international economic cooperation as their best course to break out of the American encirclement strategy. China wanted to offer the world an alternative economic order to break with US hegemony. Thus, the Belt and Road Initiative (BRI) was launched.

What is the BRI?

Unmatched in world history, the BRI is a multi-decade initiative expected to cost over $8 trillion, reach 6 billion people—70% of the earth’s population, and be completed by 2049, the 100th anniversary of the founding of the People’s Republic.

The “Belt” refers to the overland trade routes of roads and rail through the landlocked countries of Central Asia and the Middle East starting from China’s Western region. As in the ancient Silk Road, Xinjiang plays a vital role in the BRI. This is why the Western powers do everything within their control to subvert and destabilize China in this region. Through interconnecting highways and rail, the Belt will reach into Russia and Western Europe.

The “Road” refers to the “21st Century Maritime Silk Road.” The maritime routes will ply the waters of the Indo-Pacific oceans through Southeast Asia, South Asia to the Middle East and Africa. Maritime infrastructures such as seaports and container port facilities are being built. Russia and China have entered into an agreement to build the “Ice Silk Road” along the northern sea route in the Arctic.

Why is the BRI so significant?

The BRI is more than the ancient trading Silk Road, which was a western-centric nomenclature. During the colonial era, all the famous trade routes were used to extract resources from the global south to benefit the old-world imperial powers. The new Silk Road actually builds the infrastructure of trade in ports, roads, railroads, airports, dams, tunnels and bridges to allow the participating countries the ability to independently manage their own economic affairs, thus breaking free of reliance on the imperial powers.

The Chinese government knows that in order to break out of the military encirclement of the US, it must build up its alliances with other countries still under the thumb of US imperialism. The BRI is a non-military, economic development strategy to build common prosperity through international cooperation, mainly in the Global South. If the BRI plan succeeds, international prosperity can be achieved and the Global South would have broken free of the centuries’ old paradigm of Western colonial economic dominance.

To date, 140 countries around the world have signed onto the BRI. These include:

· 40 countries in Sub-Saharan Africa

· 34 countries in Europe & Central Asia (including 18 countries of the European Union)

· 25 countries in East Asia & Pacific

· 17 countries in Middle East & North Africa

· 18 countries in Latin America & Caribbean

· 6 countries in South East Asia

One of the key BRI projects underway is the China – Iran New Silk Road rail line from Inner Mongolia by way of Urumqi, Xinjiang to Tehran. The movement of goods by this line will help break US sanctions on Iran. In 2016, thirty-two containers were shipped through interconnecting rail lines from Yiwu on the east coast Zhejiang province to Tehran, travelling the 10,399 km trip in 14 days. The same trip by sea would have taken 44 days. Through the BRI, Chinese SOE’s are helping Iran expand its rail network, including high speed rail lines. The China to Tehran railway also links the Central Asian countries of Kazakhstan, Kyrgyzstan, Uzbekistan and Turkmenistan as well as separate projects in Tajikistan. The rail and road links will eventual expand to Western Europe, with European countries like Austria, Hungary, Poland, Portugal, Luxembourg, Greece and Italy already onboard. Interestingly, out of the Five-Eyes countries, New Zealand is the only one in the BRI.

Part 2: Common Myths of the BRI.

Canada has not signed on the BRI. True to form, many in the Canadian media are decrying the dangers of “Chinese world domination.” Canada, however, is a full member of the Asia Infrastructure Investment Bank, a key organization in financing BRI projects. Canada became a member of AIIB with an initial investment pledge of $256m in 2018. There is now a concerted effort by the Conservatives to pull Canada out of the AIIB.

The new US president, Biden, is saying China “will eat our lunch” on infrastructure spending. The US is now floating the idea of building its own “BRI” among its allies. As if it did not have enough issues to contend with, the Americans are developing an anti-BRI strategy to further smear China. They are saying that China is weaponizing the BRI and that it will be a debt trap for countries involved as they claim that China is striving for world domination. Some in the Western left are aiding and abetting the US propaganda by asserting that the BRI is prove of Chinese imperialism. More on that later.

Debt Trap Diplomacy

China’s debt trap diplomacy was conjured up by the US State Department and ex-CIA chief Mike Pompeo to scare countries from entering into any arrangement through the BRI. According to this theory, the powerful lending country will saddle the borrowing country with enormous debt so the lender will have leverage over the borrower. The US has had long experience in debt trap schemes, so they know what they are talking about, and they project these problems to China.

Now to debunk one of the famous examples of China’s “debt traps.” It is Sri Lanka’s Hambantota port project. It is used by the right-wing as well as the left-wing pundits as the example of China’s usury and imperialist extortion. But before we go there, let’s set the stage to discuss the agreement China’s COSCO (China Ocean Shipping Company) has with Greece in the port of Piraeus.

At the height of the Greek debt crisis, the Left-wing SYRIZA party led by Alexis Tsipras was elected to power in 2015 on an anti-austerity platform. The finance minister was the celebrity economist Yanis Varoufakis who was tasked with negotiating the bailout with the Troika of the European Commission, International Monetary Fund and the European Central Bank. Talk about a debt trap, the Troika bailout would require Greece to maintain an austerity policy and to repay the loans until beyond 2060. The short-lived finance minister, Varoufakis was in office from January to July, 2015, also negotiated with China who was willing to invest in Greek infrastructure as an integral part of the BRI.

According to Varoufakis, he was able to renegotiate a previous agreement with China on different terms that provided for a “win-win” approach. It was not a matter of lending money and forcing privatization and austerity as the EU imposed, the Chinese wanted to invest with a horizon of 30 -40 years by building infrastructure. From the Morning Star article, “The new proposal was for China to invest in railways, technology parks, shipbuilding and tourism and at the same time to ensure secure employment, accepting collective labour agreements with the trade unions. There were also to be profit-sharing agreements with local governments.” The initial agreement was not signed due to pressure from the EU. Much of the terms in that Memorandum of Understanding has since entered into new agreements where COSCO, the shipping conglomerate founded by the Chinese government in 1961, was granted the right to own 51% and to invest (900 million Euros) and to operate the port of Piraeus.

Hambantota is at the south coast of Sri Lanka on the Indian Ocean. It is the focus of the West’s accusation of debt trap diplomacy against China and the left-washing pack’s accusation of Chinese neo-colonialism. For a more objective analysis which the lazy mainstream media has not sourced, there is an article by Deborah Brautigam, Bernard L. Schwartz Professor of International Political Economy, School of Advanced International Studies, Johns Hopkins University and Meg Rithmire, F. Warren McFarlan Associate Professor, Harvard Business School. “The Chinese ‘Debt Trap’ is a Myth” appeared in the February 6, 2021 edition of the Atlantic and says “The narrative wrongfully portrays both Beijing and the developing countries it deals with.”

The story begins in 2003 when the Canadian International Development Agency (CIDA) commissioned SNC-Lavalin to do a feasibility study. Yes, that Engineering construction company that got Justin Trudeau into hot water and banished two of his leading women cabinet ministers, Jody Wilson-Raybould and Jane Philpott, to political purgatory.

SNC concluded that a port at Hambantota was feasible and recommended that Canada get involved in the project on a build-own-operate and transfer basis. However, the Canadian inspired project did not get any traction and the project was shelved. In 2004, a devastating tsunami destroyed the Sri Lankan coast and much of the infrastructure had to be rebuilt. The Danish Engineering firm, Ramboll did a second feasibility study in 2006 and came to the same conclusion as SNC to build the port and have experienced operators to manage it.

The Sri Lankan government approached the United State and India but both countries refused to back the project. Then in 2007, the Chinese Engineering/Construction firm China Harbor partnering with state-owned China Eximbank stepped in to offer financing and construction of the port. Eximbank offered an initial loan of $307 million for 15 years based on a fixed rate of 6.3%, or at a floating rate based on LIBOR. The Sri Lankans chose the fixed rate. In 2012, the government came back for another loan of $752 million from Eximbank, this time at 2%, the post-financial crisis going rate.

By 2014, Hambantota was bleeding money. The Sri Lanka Ports Authority approached experienced operators, China Harbor and China Merchants Group to operate jointly the port for 35 years. The 2015 elections, with the usual anti-China political rhetoric, brought a change of government and Maithripala Sirisena became prime minister. At that time, Sri Lanka owed more to Japan, the World Bank and the Asian Development Bank than to China. Of the $4.5 billion in debt service paid by the government only 5% was because of Hambantota.

There was never a debt default. Sri Lanka arranged a US$1.5 billion bale out from the IMF in 2016. To raise funds, the Ports Authority decided to lease out Hambantota to more experienced operators –as recommended by the SNC study 13 years earlier. The China Merchants Group became the majority shareholder of the Port with a 99-year lease. Sri Lanka used the IMF cash infusion to support its foreign reserves and not to pay off China Eximbank.

Thus, the story of Hambantota. Not very exciting but the US State Department can spin it to show that the Chinese government cannot be trusted and that countries that cooperate with China are dupes. As Sri Lankan-born Canadian writer Michael Ondaatje puts it, “In Sri Lanka, a well told lie is worth a thousand facts.”

CIDA was formed in 1968 to carry out Canada’s imperialist agenda in the developing countries. Stephen Harper in 2013 in an effort to reduce Canada’s foreign aid eliminated CIDA and folded its work into Global (Foreign) Affairs.

Canada is in no shape to compete with the BRI but it is sniffing around one of the key regions of BRI infrastructure development, Central Asia. Canada’s participation is partnered with the World Bank-influenced Asia Development Bank and the European Bank for Reconstruction and Development, which is directing its focus to Central Asia.

The 5 countries in this region, Kazakhstan, Kyrgyz Republic (Kyrgyzstan), Tajikistan, Turkmenistan and Uzbekistan are crucial to the BRI. They form one of the main corridors and the “Buckle” in the Belt of the BRI.

The BRI’s goal is to strengthen the economic independence of these countries. Unlike the west, China has no intention of interfering with the internal political system or governance of the participating countries. The ubiquitous CIA/National Endowment for Democracy, however, ploughed $4,225,000 into the 5 Central Asian countries in 2020:

Kazakhstan: $1.035M; Kyrgyz Republic: $2.177M; Tajikistan: $451,000; Turkmenistan: $191,000; Uzbekistan: $371,000.

Trouble always follows NED money, demonstrations were held in Kazakhstan in March 2021 against China’s “influence” in the country and its treatment of the Uyghurs in Xinjiang.

Canada’s response to the BRI is the usual Cold War rhetoric as voiced in its Global Affairs website: “BRI reflects Beijing’s vision for a new world order. The leadership has recently become more blatant in its denunciation of the current order, criticising it as unfair and biased against emerging powers.” The only agreement Canada has related to the BRI is that signed by the former B.C. Liberal government of Christy Clark. The “World Commodity Trade Centre” is a $190 million, 470,000 square foot complex being built by a consortium of Canadian and Chinese companies in Surrey, B.C. This warehouse will accommodate the import/export trade between Canadian and Chinese companies.

In the first five years of the BRI, China built 200 hydroelectric dams, 41 gas and oil pipelines and 203 railway lines, roads and bridges in Africa and South and Central Asia.

The Belt and Road Initiative will forge a new international economic order. It will break the hegemony of Western imperialism, especially that of the US. China and the countries embarking on the BRI hope that it will bring prosperity to the world.

The 2nd article in this series will deal with the left-washing pack of naysayers that claim China is imperialist and using the BPI for world domination. Wait, is this the social democratic left or the right? When it comes to international affairs there is little daylight between the two.

William Ging Wee Dere is the author of the award-winning “Being Chinese in Canada, The Struggle for Identity, Redress and Belonging.” (Douglas & McIntyre, 2019). He was a political organizer and a leading activist in the 2-decade movement for redress of the Chinese Head Tax and Exclusion Act.

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