It has been more than seven years since the “Belt and Road” was formally proposed in 2013 as an expansion of the Chinese Communist Party in the name of globalization. Although, as of November 2020, the CCP claims to have signed 201 cooperation documents with 138 countries and 31 international organizations to build the Belt and Road, it is difficult to say that it is a successful strategy overall.
Why? Let’s look at two precise cases of U.S. strikes against the “Belt and Road” project’s shortcomings.
Case 1: On December 9, 2020, the U.S. Treasury Department announced sanctions against Wan Kuok Koi (nicknamed “Bashing Teeth”), a member of the Chinese Communist Party’s Chinese People’s Political Consultative Conference and head of the 14K Triad, under the Global Magnitsky Human Rights Accountability Act, on the grounds of anti-corruption. Wan has established business networks to illegally benefit from the Belt and Road infrastructure projects. The U.S. Treasury Department found that Wan or members of his business were involved in embezzlement, misappropriation of public funds, expropriation of private property for personal gain, corruption related to government contracts, exploitation of natural resources, and bribery. The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFCA) also blacklisted three entities owned or controlled by Yin: the Cambodia-based World Hung-Mun Historical and Cultural Association (an association used by the Triad to clear its name), the Hong Kong-based East American Investment Group, and the Palau China Hung-Mun Cultural Association in Palau.
Case 2. On April 10, 2019, the Wall Street Journal reported that the Chinese Communist Party had planned to invest in a deep-water port project in Kyaukpyu, Myanmar. The deep-water port, located at the entrance to the China-Myanmar oil and gas pipeline, is one of the core projects of the China-Myanmar Economic Corridor, one of the six corridors of the Belt and Road Initiative, with a total investment of $7.3 billion. At the request of the Burmese government, USAID sent a team of economists, diplomats and lawyers to help review the contract to ensure there were no hidden pitfalls. Subsequently, Burma and the Chinese Communist Party renegotiated and squeezed out as much as $6 billion, finalizing an investment of only $1.3 billion.
The corruption and (hidden) debt traps exposed in these two cases are not isolated, but are widespread and common in the Belt and Road projects.
For example, former Malaysian Prime Minister Najib, former Sri Lankan President Rajapaksa, former Kyrgyz President Atambaev, former Maldivian President Yameen, and former Ecuadorian President Correa, among others, all received large sums of money from the Chinese Communist Party.
For example, when the Chinese Communist Party built the Hambantota Port in Sri Lanka, a “Belt and Road” project, Sri Lanka had to lease the strategic port and 15,000 acres of land around it to the Chinese Communist Party because the investment was so huge that Sri Lanka could not afford to pay its debts. for 99 years. Even then, it could not repay the CCP’s debt and had to borrow new debt from the CCP to pay off the old one.
Again, on April 15, 2019, Malaysian Prime Minister Mahathir announced that a supplementary agreement had been reached with the Chinese state-owned company Transport Construction Co. over the East Coast Rail Link (ECRL) project. The cost of the first and second phases of the restarted East Coast Rail Link project in Malaysia was drastically cut by about one-third from the original nearly $16 billion to $10.7 billion. This major project was called off after Mahathir’s election in May 2018. The price cuts significantly reduced Malaysia’s debt exposure.
It is because of the project’s ills that many countries are resisting the Belt and Road. In the latest case, the Wall Street Journal reports that Romania and Lithuania are taking extensive measures to exclude Chinese companies from certain public infrastructure projects. Authorities in Slovenia, Croatia, the Czech Republic and Romania have suspended public tenders for nuclear power plants, highways, rail lines, security scanners and a shipping container terminal project involving Chinese companies. Greece is discussing whether to allow a Chinese shipping company to increase its majority stake in the country’s largest port. Officials involved in the decision say the shifts are driven by national security concerns and frustration with the performance of Chinese contractors.
After examining the process and status of the Communist Party’s Belt and Road Initiative, as well as China’s domestic and international situation, this article concludes that the Belt and Road Initiative will ultimately fail. Three reasons are outlined here.
One, the “One Belt, One Road” has been implemented for several years, and various drawbacks have surfaced, and the relevant partner countries are complaining.
“Many of the Belt and Road projects are not very viable (the World Bank and the Asian Development Bank have proven experience, and if they were quality projects, they would have been taken over by them), but only because of the political operation of the Chinese Communist Party. “In the process of promoting the Belt and Road, many of the projects are full of illnesses from design to implementation and operation due to the CCP’s political leadership, its ambition, its lack of experience and ability to operate international projects, and the shuttle of various interest groups.
The international community has criticized the Belt and Road project for 1. lack of economics (low operating returns, high financing costs, or low quality implementation); 2. debt trap loans (funds provided to partner countries raise their debts to unsustainable levels); 3. lack of attention to compliance (the CCP state-owned companies implementing the projects contribute to Corrupt practices and disregard for compliance best practices); 4. Lack of attention to sustainable development goals (environmental damage, neglect of local human resource development and social services for the project); 5. Regional and global benefits to China (internationalization of the renminbi, project flows to Chinese banks and companies, development of regional infrastructure networks centered on China); 6. Subversion of established uses (projects may be diverted to military uses against the wishes of the host country); 7. 7. economic dependence of partner countries on China (privileged access of the CCP to partner countries’ resources and markets, privileged role in shaping partner countries’ economic affairs).
Second, the Belt and Road Initiative is a trillion-dollar “big money” project that the Chinese Communist Party is unlikely to be able to support.
Because of China’s continued economic decline in recent years, the U.S.-China trade war and the pandemic, the Chinese Communist Party has significantly reduced funding for international infrastructure under the Belt and Road Initiative. The Center for Global Policy Development at Boston University’s database of Chinese overseas development finance shows that the Communist Party’s China Development Bank and China Exim Bank lent just $4 billion overseas in 2019, far less than the $75 billion they lent in 2016. And according to the data on China’s outward non-financial direct investment in 2020 released by the CCP’s Ministry of Commerce, its investment in countries along the Belt and Road will be $15.08 billion and $17.844 billion in 2019, respectively. In addition, complications with agreements and debts between the Chinese Communist Party and individual Belt and Road countries have also put the Belt and Road in a difficult position over the past two years.
Oxford University China scholar Li-Men Fu argues that while the Belt and Road is currently in jeopardy, aggressive transformative measures by the Chinese government are likely to resurrect it and pose even more of a threat. He said, “Combining vaccines, green technology, and digital technology, along with authoritarian tools, I think China [the CCP] is building a scary global expansion strategy, and its shell is ‘One Belt, One Road.'”
Third, since 2017, countering the CCP’s global expansion has become the main line in the evolution of the international strategic landscape, and the “Belt and Road” has intensified the confrontation between the CCP and some major powers; for the CCP, the international situation has been fundamentally reversed and there is no way back.
In February 2018, the BBC Chinese website published an article titled “US, Asia, Europe counter ‘One Belt, One Road ‘ on all sides?” According to the article, the Communist Party of China’s high-profile “One Belt, One Road” project has caused growing concern in the international community. As an authoritarian power expands its international influence, will other powers stand idly by?
Take the U.S. Trump administration (2017.1-2021.1) as an example. The U.S. version of the Belt and Road Initiative (BRI) has been proposed to “level the playing field” with the Chinese Communist Party and create alternative models of development cooperation. The U.S. version consists of three major initiatives: “Prosperous Africa,” “Growth for the Americas,” and “The Asian Advantage.” In May 2020, the White House released the “U.S. Strategic Approach to China,” in which these three initiatives were first introduced as a means of implementing the U.S. strategic approach to China. For the first Time, these three initiatives have been identified as important regional strategies for implementing economic competition with China.
Moreover, the U.S. version of the initiative follows the principles of U.S. foreign aid that have been in place for many years, with particular emphasis on three points (in contrast to the CCP): first, avoiding debt traps (the United States requires long-term partnerships and does not want to become a debtor); second, hiring local labor (aid is not real aid if it is used to hire workers in the country); and third, transparency (to combat corruption, U.S. aid projects include certain allowances for any local workers). projects include certain safeguards that allow anyone, anywhere, to track the flow of funds).
Conclusion
There is also disagreement within the Chinese Communist Party over the Belt and Road Initiative. For example, one senior diplomat has alarmed that the Belt and Road could become a “two-pronged rope” that could strangle the CCP’s diplomacy.
Practice shows that the Belt and Road is not a road of “peace, prosperity, openness, innovation and civilization” as claimed by the CCP, but a road of “strife, corruption, falsehood and darkness”.
How far can the CCP go on such a road? The CCP itself will not know where the road ends.
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