You can see the potholes strewn across China’s US$1 trillion Belt and Road Initiative.
Amid the carnage of the Covid-19 crisis, President Xi Jinping’s high-profile foreign policy strategy has careered off the highway.
Lockdowns across the globe have wrecked economies and left a trail of rising debt, halting infrastructure projects linked to Beijing’s New Silk Roads.
Political tension and the fallout from deteriorating relations between China, the United States and its allies have also derailed B&R schemes.
The latest flashpoint came in Australia this week after Canberra canceled major deals with the world’s second-largest economy.
“[We are] focused on Australia’s national interest … [while we] have to acknowledge that China’s outlook, the nature of China’s external engagement, both in our region and globally, has changed in recent years. [We have] to adapt to those new realities,” Australia’s Foreign Minister Marise Payne told the media.
- The B&R Initiative is the jewel in the crown of Xi’s foreign policy and was rolled out in 2013.
- These New Silk Roads include a maze of multi-billion-dollar infrastructure projects and digital links.
- They involve at least 70 nations and 4.4 billion people across the world.
- For China, this is a 21st Century upgrade of the old Silk Roads.
- But many of the nations that have joined the B&R program are now struggling to pay off the interest on loans.
- China has steadily increased its lending and is now the world’s largest official creditor.
What that means: “The data that we put out called IDS, the international debt statistics report, showed that of the official bilateral creditors – all the different credit agencies of the governments around the world – 65% of that debt is owed to Chinese creditor agencies,” World Bank President David Malpass said in December.
Road to Perdition: “China’s ‘debt trap diplomacy’ is not a figment of imagination. While it may have decided, for strategic reasons, to keep it in abeyance in some parts of the world, it is blatantly apparent in others,” Shantanu Roy Chaudhury at the Centre for Air Power Studies in New Delhi wrote in a commentary about the Belt and Road Initiative for The Wire.
Big Picture: The B&R is not just a political project. It has also helped fuel China’s massive industrial complex by cashing in on overcapacity at home. At the same time, it has showcased Chinese high-tech groups, such as 5G giants Huawei and ZTE, in building digital Silk Roads.
Winds of change: The diplomatic landscape has been remodeled since the halcyon days of 2013. Beijing and Washington are now locked in a New Cold War covering an array of issues from human rights to predatory trading practices. Allies, in turn, have been caught in the crossfire.
Political pushback: Australia has been a victim of China’s new assertive policy. Diplomatic relations between Canberra and Beijing hit rock bottom last year after Scott Morrison’s government called for an independent investigation into the origins of Covid-19. It first surfaced in the Chinese city of Wuhan at the end of 2019.
Belt and Road snub: “The action [by the Australian government] is likely to elicit another sharp response from China, which is extensively targeting Australian trade and regularly delivers rhetorical attacks,” Michelle Grattan, of the University of Canberra, wrote in a commentary for The Conversation on Thursday.
Bullet from Beijing: “Australia should avoid making already strained bilateral ties worse. It is the only country to tear up a Belt and Road agreement, setting a dangerous precedent. China reserves the right to take further action,” Foreign Ministry spokesman Wang Wenbin said at a regular media briefing.
China Factor comment: A microscopic enemy has overshadowed the sprawling Silk Road project in the Year of the Virus. But as the global economy gradually recovers, the spotlight will again fall on this huge infrastructure development. Only this time, Beijing’s hardline “Wolf Warrior” approach to foreign relations is likely to scare not entice potential customers.