Macaes has written the definitive book on China’s “One Belt, One Road” strategy. It dovetails nicely with his previous book, “The Dawn of Eurasia.” He begins, “The new Eurasian century is not one where different regions of the world converge towards a single model. For the first time in many centuries, we are forced to live with cultural contradictions.” Macaes defines Eurasia as a landmass stretching from Portugal to Indonesia, containing about two thirds of the world’s population and its global output. Belt and Road is China’s attempt to dictate the terms that will define this entire region and even beyond. Macaes states, “Belt and Road is already in its fundamental traits the map of the world to come—as China imagines it…. China is the only country that can genuinely be said to be universal, to over-step its boundaries, extending its presence to distant geographies.” Of course, in the map of the world that is, that distinction belongs to the United States, for now.
Chinese strategic policy has the long game in mind for Belt and Road. “The timeline for its realization [has] been fixed at more than thirty years, with the first phase of the project to be concluded in 2021 and the project as a whole realized by 2049.” But what exactly is Belt and Road? China sees the policy as a realization beyond a mere transportation network or a neo-Silk Road. Instead, Xi and the Chinese Communist Party intend that “an interconnected system of transport, energy and digital infrastructure would gradually develop into industrial clusters and free trade zones and then an economic corridor spanning construction, logistics, energy, manufacturing, agriculture and tourism, culminating in the birth of a large Eurasian common market.” It is nothing less than the reshaping of world trade and power structures.
China realizes that it can no longer just transform its domestic economy. It is now fully embedded in the world economy, with its flow of goods and services. Thus, China now seeks to exert control abroad and attempt to manage the world economy, as well. China survives on a cycle of imports of commodities and exports of finished manufactured goods to sustain its breakneck growth. “China’s predicament [is] having “two heads abroad” (“liangtou zai haiwai”). [It is] critically dependent on accessing commodities, energy and raw materials while needing to find constantly growing markets for its exports…. The realization that China was now highly dependent on foreign markets made it clear that some level of political influence over the latter would have to be developed.”
China’s guiding principal is Tianxia- All-under-Heaven. In China’s hegemonic heyday, in practicality, that meant “a specific legal and institutional form: the tributary system. Under this hierarchical order, foreign states, attracted by the splendor of Chinese civilization, voluntarily submitted to the Chinese court and became vassals…. Instead of territorial boundaries, relations between states were expressed by the aforementioned hierarchical relationship…. The ambiguity of the system—its units were simultaneously part of a single order and left alone to govern their affairs—meant that ritual and symbol became more important than legal status…. It is precisely in this informality that the initiative [Belt and Road] most obviously differs from the existing Western order which emphasizes legal and institutionalized procedures…. Because it is based on relations of dependence, it cannot but reproduce relations of power.” Belt and Road is, in its very nature, personality-based and anti-rule of law.
The Chinese Communist Party’s tool for steering Belt and Road is finance. “Beijing regards financing mechanisms as a critical part of the initiative, the motor of the engine…. The giant state banks—Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China and China Construction Bank—will retain a dominant role…. The Asian Infrastructure Investment Bank, founded on December 25, 2015 with its headquarters in Beijing and an authorized capital of $100 billion—about half that of the World Bank—considers Belt and Road projects as one of its investment priorities…. The Silk Road Fund is a development and investment fund established in Beijing on December 29, 2014 with an investment of $40 billion from the State Administration of Foreign Exchange, China Investment Corporation, Export-Import Bank of China and China Development Bank…. China Development Bank set up a Belt and Road project pool involving over 900 projects from over sixty countries…. Industrial and Commercial Bank of China, the largest bank in the world by assets, is already taking part in 212 projects related to Belt and Road, with credit facilities exceeding $67 billion.” This constitutes State control of public and “private” financial assets on a massive scale. “Central Huijin—a subsidiary of China’s sovereign wealth fund—has become the largest shareholder in the main commercial banks.… The Chinese state has “refashioned itself a shareholder and institutional investor in the economy and resorted to financial means to manage its ownership, assets, and public investments.”” Belt and Road is the tool for projecting Chinese power onto the world stage.
Structurally, Belt and Road primarily refers to land and sea transport networks, respectively. “China has proposed a framework including six corridors, six means of communication, multiple countries, and multiple ports.” The Belt portion refers to the fact that these land corridors (as opposed to the sea “roads”) are not just destinations, but conveyor belts of industry. “The economic corridor concept deliberately considers the whole space…. to build an expanded “factory floor” along the full economic corridor and across national boundaries.” In sea transport, China is developing a “Ports-Park-City” model, where new ports are being built in conjunction with new (free trade) industrial zones, and residential units for workers. These are fully integrated industrial hubs built from scratch, not just transport routes. Chinese strategic goals are well developed and patiently executed. As the Pacific Journal, a Mandarin-language newspaper, puts it, the Chinese Communist Party’s strategy is to “select locations meticulously, make deployments discreetly, give priority to cooperative activities and penetrate gradually.”
One aim of Belt and Road is to put China on top of a new global commercial order. “Belt and Road is the first example of “transnational” industrial policy.” To succeed China must dominate the new manufacturing value chains. “When China develops a policy toward important commodity producers, it is less interested in securing access to commodity markets than in building highly efficient value chains where it can occupy the top segment.” This requires disrupting Western supremacy at the coordinating rung of trade. “The strategic task of transforming Chinese manufacturing “from large to strong” will be realized with the transformation from Made in China to Created in China, from China Speed to China Quality, and from Chinese Products to Chinese Brands.” China is seeking nothing less than to create the new international standards on which the rest of the world must rely and adopt in fields such as construction, container shipping, high-speed rail, finance, satellite global positioning, electric car batteries, and mobile communications networks. “International industrial capacity cooperation” is China’s way of exporting State guidance beyond its own borders. “Under the Belt and Road, countries open their policy-making processes to other countries before and above opening their economies to foreign companies.” It is left unsaid that “the initiative and final strategic vision always lies with Beijing.”
Belt and Road will fully transform the geographic landscape and population centers of the many countries that become connected to it. “The best image of the Belt and Road is not trains crossing the Eurasian supercontinent, or the ports and industrial parks opening along the way. It’s the cities being built up from scratch…. It’s really about ecosystems: collections of companies, workers and consumers—clusters of culture, social life and economic activity.” Brahma Chellaney cautions, “By integrating its foreign, economic, and security policies, China is advancing its goals of fashioning a hegemonic sphere of trade, communication, transportation, and security links. If states are saddled with onerous levels of debt as a result, their financial woes only aid China’s neocolonial designs.”
Macaes goes into detail describing China’s burgeoning relationships with many countries. One of the most important, most fully developed, and most fully integrated into Belt and Road is its relations with Pakistan. “If Kazakhstan serves as China’s gateway to Europe, Pakistan is its gateway to the Indian Ocean.” This is a cohesively planned endeavor. “International business cooperation with Pakistan should be conducted mainly with the government as a support, the banks as intermediary agents and enterprises as the mainstay.” Cooperation with Pakistan on Belt and Road was also the first time explicit military “security guarantees” were made public. Of course, transport and access to markets is always integral, if not all important. China’s goal is to construct and control ports that can serve dual purposes- both commercial and military. Pakistan also serves China’s mission of “liangtou zai haiwai,” being both rich in natural resources to exploit and having a large population, an ideal market for finished goods. “The Chinese-Pakistan Economic Corridor is a development corridor covering Xinjiang province and the entire territory of Pakistan. Its spatial layout is described as comprising one belt, three axes and several passages.” Its crown jewel is Gwadar Port. Macaes makes the bold claim, “Gwadar lies in a privileged position, with a claim to becoming a new Chinese coastal city.” The question remains how Pakistani Gwadar will remain or whether China will come to own it and, in fact, become de facto rulers. “Debt diplomacy may turn out to be extraordinarily successful as China obtains majority ownership in some of the critical infrastructure of the future world economy.” This is not just idle speculation, but reality on the ground. “In December 2017 Sri Lanka formally handed control of Hambantota port to China in exchange for writing down the country’s debt. Under a $1.1 billion deal, Chinese firms now hold a 70 percent stake in the port and a 99-year lease agreement to operate it.” The signs for Pakistan are not promising. “Pakistan’s [Chinese manufacturing] imports are set to top $27 billion by 2021. Pakistan can pay for Chinese machinery with Chinese loans, but unfortunately these loans are due before the economic gains that will be used to pay for them are accrued.” More generally, “nearly two-thirds of the world’s top sixty container ports…. received some degree of Chinese investment by 2015…. Ports such as Gwadar and Kyaukpyu are meant to connect the Indian Ocean with China via overland transport corridors…. Using overland pipelines connected to Gwadar will reduce the distance from the Persian Gulf to just 2,500 km…. While ports such as Hambantota are close to existing shipping lines, others such as Gwadar presuppose a significant redrawing of those lines in the future.” China’s ambitions are bold and will have repercussions felt throughout the world. “Antwerp, Hamburg, London, and Rotterdam are the main ports where containers are discharged today and the cargo distributed all over Europe. With [China’s] engagement in Mediterranean ports like Piraeus and potentially Trieste, Venice or Istanbul, China may hope to start changing the spatial pattern of the container shipping system.”
A more revolutionary geo-political development might be China’s proposed canal project in southern Thailand. “Bypassing the Malacca strait by building a canal through the Kra Isthmus in Thailand—around 100km long and 25 meters deep, it would take ten years to build—could be an even greater game changer…. [because it would allow] deployment of the Chinese navy to the Indian Ocean.” China is fully integrating commercial and military assets into a single strategy. “China passed a law in 2016 creating a legal framework for the use of civilian assets to support military logistics operations and requiring all Chinese industries that conduct international transportation to provide supplies and aid to the Chinese navy as needed.”
Macaes ends his book by speculating on options for China’s continued rise in the world order. He suggests that “it is possible to argue that, by creating a parallel structure of institutions, China is not setting out to destroy the Western-led order. Its initiatives in the realms of finance, currency, infrastructure, trade and security—most of them now subsumed under the Belt and Road—are meant to provide China with alternatives, to reduce its dependency on the existing order and limit risks, without thereby reducing its support for the current order.” However, Macaes himself suggests that it is much more likely that China is seeking to upend the neoliberal status quo. “On a wide range of issues from the Internet to human rights and sovereignty claims in the South China Sea or global trade, China is putting forth a clear challenge to the existing liberal order.” He quotes Joe Kaeser, CEO of Siemens, “China’s Belt and Road will be the new World Trade Organization—whether we like it or not.” Chinese Foreign Minister, Wang Yi, also asserts, “China will actively explore a way of resolving hotspot issues with Chinese characteristics and play a bigger and more constructive role in upholding world stability.” As Macaes points out, “it can no longer be said that the Chinese are indifferent to how other people govern themselves.” Xi Jinping, himself, stated that China is “blazing a new trail for other developing countries to achieve modernization [providing] a new option for other countries and nations who want to speed up development.”
Whatever the case, it seems clear that the Whig theory of history, where every country progresses ever-forward towards a predetermined endpoint, is not in the cards.The age of a single global hegemon seems to have passed rather quickly, as we have drifted back into a realist world of competing State interests and alliances. “A multipolar world system would be based on different spheres of influence, as different actors pursue independent paths, even if they are also able—in limited areas—to influence and shape each other’s system of norms.” Macaes concludes, “The Belt and Road may never become universal—just as the West never became universal—but in some areas it will rule unimpeded and different shades of influence will be felt everywhere.”
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