The Belt and Road Initiative
Hi! Welcome to the Global Thread Podcast. I’m your host, Yasmin Aliya Khan, and today we’re talking about China’s Belt and Road Initiative.
Hey, everybody. So glad to have you here today! I’m happy to be back after taking a small break to do some traveling. It was my first flight since Covid hit forever ago, so it’s safe to say that I was feeling a little antsy. I took a trip up to New York to see some folks out there - got to check out Trump Tower, which was fun and weird - then stopped in at my hometown in Connecticut to check up on my old house, and finally, finished off the trip with some family time in Boston. I really wanted it to feel like fall for my birthday this year and in Texas, that’s never really the case. I figured New England in my birthday month is close enough. My birthday’s on Wednesday, by the way, in case anyone’s wondering…
Also, you’re going to have to excuse my voice. It seems to be doing pretty OK right now, but we’ll see how long it lasts. I came down with something once I got back to Texas - not Covid or anything - but my throat is still a little scratchy. It should be fine, though. I don’t think this will be a terribly long episode. I can do it.
Today’s topic is a little less conflict-driven and more about a larger geopolitical force coming out of China. This “force” is already impacting countries around the world, including all but one nation in Africa, several critical countries in the Middle East and Asia, and more. In this episode, we’re going to talk about what “One Belt One Road” means, what its purpose is, how it’s being implemented, what it means for the countries involved, and what it means for the global balance of power.
At its most basic level, the Belt and Road Initiative is about trade and influence, so understandably, it’s often referred to as the new Silk Road. I remember learning about the Silk Road back in grade school. It was trade and connection in a world that was largely disconnected to a degree that is almost unfathomable to modern minds. It’s strange because in just the almost-33 years I’ve been alive, technology has expanded and progressed so rapidly that we forget that not too long ago, it was nearly impossible to get items from across the globe. Even making a phone call to another country was often considered to be prohibitively expensive.
Strange to think about how far we’ve come in such a short span of time. Perhaps this pace that we’ve grown accustomed to is unsustainable, but as is often the case, once you head down one road, it’s difficult and rare to reverse course. At best, you can redirect yourself, but the larger the vehicle, the harder it is to turn. It’s unlikely you can turn dramatically without some casualties along the way, too.
You’ve seen Titanic, right? I just watched it the other day… It's on Netflix. In the case of Titanic, which is a very literal and physical example of a dramatic turn, the whole thing collapsed under the pressure. Despite its design flaws, it wasn’t expected to fail, so when it did, it buckled under the pressure (literally), and it sank. In its wake, the disaster left the majority of its passengers, all of whom the ship was responsible for, dead in the icy waters, apart from anything or anyone, with little to no hope, isolated in a pitch-black night in the middle of an entire ocean.
To use another barely relevant example, think about Facebook - not just the social media platform, but the corporation and all of its subsidiaries. In not even two decades, which is a fraction of a blip in the span of human existence, the world has transformed and we’ve transformed with it. People are different today than they were twenty years ago, with shortened attention spans, widened generational gaps, and the constant threat of wrenches being thrown in what we think we understand about the world and its people. We have more access to information than ever before, but to deal with the enormity of what the world wide web has become, we’ve created spaces for ourselves within it. The problem of misinformation is more of a threat than ever, with lies spreading at an exponential rate when compared to the truth. Half-truths are another problem on their own, with people assuming they understand more about a situation or a people than they actually do.
The point is, everything has its tipping point or a bursting point. Momentum can only drive a thing so fast for so long, and the bigger something gets, the more impactful the collapse. I mention this because there is risk in building something at an unprecedented scale at an unprecedented rate, which is something to keep in mind as we work our way through this episode. Problems can arise that are unforeseen because there’s hardly any time to monitor the situation as it progresses. Everything is new - the old data points and hypotheses don’t necessarily apply. When growth is the primary motivation, there’s simply no incentive to slow it down.
All of that said, in the case of the Silk Road as it existed in pre-modern times, it actually was able to shift decently well from a network of trade routes to something else entirely. Of course there were casualties, but it actually ended up shaping and re-shaping many aspects of the world, setting the stage for the lives we lead today. Of course, of course, you can probably say that about any single event in history, but that’s the thing - this wasn’t a single event. It was a transformation that took place over a long, long time.
Slow and steady wins the race, right? We seem to have forgotten that today. We’re all a bunch of hares racing to some undefined finish line, and it might catch up with us.
[THE SILK ROAD]
The Silk Road came about somewhere around 500 BCE when Chinese trade routes merged with routes from Central Asia. The road, which was really more of a network rather than one road, eventually would span roughly from Rome to the Pacific, even including parts of Northern Africa.
If you look at the geography of Asia and Eastern Europe, to call it “formidable” seems insufficient. Apart from the deadly swaths of desert and steppe that travelers would have to cross on foot, the road went dangerously close to the Hindu Kush mountains and the Himalayas, some of the most dangerous terrains in the world.
Through a series of pit stops, the road functioned similarly to a relay race, allowing merchants to travel back and forth across one familiar stretch of the road as opposed to traveling the entire length of it every time they set out. This dramatically cut down delivery times, helping the whole system to function more efficiently.
Apart from the obvious trade of goods between nations, religion spread. Disease spread. Ideas spread. Technology spread. Gunpowder from the east made its way west, changing literally everything. Buddhism was exported out of India to become huge in China and Japan. Rats carried diseases from caravan to caravan. And people learned about different cultures for maybe the first time on a large, meaningful scale. Prior to the trade route having been established, civilizations weren’t often exposed to others. They didn’t know how other people lived, nor did they know where these other people even were. Maybe they’d run into some nomadic tribespeople, but that was it.
Think about how far away from your house you could get on foot, or even on horseback (horses, of course, being another export of the Silk Road). It would take forever for me just to walk to the other side of my subdivision, let alone to the next town over. Just for fun, I stuck my address on the southside of Houston into Google Maps and navigated to the Woodlands Mall, way on the other side of the city. In my car, it would take me just over an hour to get there with no traffic. On foot, it’d take me 20 and a half hours, one way. That’s several days of walking compared to one hour in the car. Today’s world is infinitely smaller than it was in 500 BCE, and honestly, I don’t think we appreciate that the way we should.
Eventually, the Silk Road would fade into history, a relic of human cooperation and a bastion of global connectivity. The reasons for its demise, much like its implementation, were largely gradual and anticlimactic. They were slow movers - the rise and fall of various empires, climate change that led to desertification and cooler temperatures, and technological advancements, specifically maritime tech, that rendered the land route obsolete. All good things have to come to an end, but as they do, the hope is that they pave the way to something greater in the future.
In the case of the Silk Road, it did (depending on who you ask). Explorers from Europe started looking for trade routes across oceans and seas rather than across continents, leading to the eventual European discovery of the Americas and Caribbean.
And the rest, as they say, is history.
[THE BELT AND ROAD INITIATIVE]
The Belt and Road Initiative, commonly referred to as One Belt, One Road, or just One Belt, is being branded as the new Silk Road. For this episode, we’ll refer to it as the BRI. It’s a massive undertaking in which China facilitates the completion of infrastructure projects around the world. They do this as an investment in the countries they’re helping with the long game being that once the countries are functioning better economically, China will reap the gains. Through these projects, China expects improvements in trade and travel, international relations, less volatile economies, and more efficient and sustainable nations.
China basically gave an open invitation to the entire world that whoever needs help can get it from them. There is a catch, though. There’s always a catch.
China isn’t doing these projects for free, nor are they doing them out of the kindness of their hearts. No superpower ever does. By funding these projects that the countries would not be able to otherwise fund for themselves, the countries are becoming heavily indebted to China, with some nations racking up debts they have little to no hope of paying off any time soon. Let’s look at Pakistan.
The China-Pakistan Energy Corridor, or CPEC, is a flagship project of the BRI. China and Pakistan have a relatively long history of supporting one another for geopolitical gains on both sides. Considering Pakistan’s geographical location, it sits wedged between India and Afghanistan, two hostile neighbors, the latter having recently been made even more hostile with the Taliban takeover of Afghanistan. If you paid extra careful attention to the previous episodes about Afghanistan, you’d know that Pakistan is also bordered by China, but just barely! They share a tiny border at the north of Pakistan. This tiny border is crucial for China. It gives China access to Pakistan, allowing China to bypass India entirely. It also gives China access to the Arabian Sea and the Indian Ocean without having to go through the more hostile Pacific routes. Access to the Arabian Sea then gives China access to the Middle East and Africa, where they already have a strong foothold. In return, Pakistan has a backer in case either of its neighbors get a little too aggressive and it gets a brand new infrastructure system spanning the length of the country, but Pakistan often goes to China for additional financial backing, as well.
“Debt-trap” or “debt book diplomacy” are terms that were recently coined to describe the relationship between China and its BRI member nations. All this means is that by providing loans to nations at high interest rates, the borrowing nations will be unable to pay off their debts to the lending nations, at least not for a long, long time. In the meantime, the borrowing nation won’t be able to act autonomously without the lending nation’s approval or oversight. Furthermore, the borrowing nation can’t afford to sully its relationship with its lender, so public disputes or criticisms of the lending nation are essentially not an option.
DId you ever know the guy in college whose parents paid for everything - his tuition, his apartment, his car, his phone - and all he did was complain about his parents behind their backs? He couldn’t actually say anything to his parents directly because if he upset them, he risked being completely cut off financially. That risk was probably way too big to venture, so the kid just dealt with whatever it was that made his relationship with his parents terrible, appeasing his parents whenever and however he could, until he finally got a job and quit the family payroll. It’s a hell of a lot of leverage those parents have over the kid, but the kid accepted their money while understanding the terms and conditions. It’s a strained relationship with a heavily skewed power balance. The kid doesn’t feel as though he has the autonomy to live his life the way he wants to live it, but it’s also hard to just do whatever you want when it’s on someone else’s dime. In this case, the parent is more like an investor than a support system, and the kid is basically helpless until he can figure out his situation.
This debt-trap diplomacy isn’t a new concept, but China’s really having a go at it. According to some, the parent-child relationship is already playing out. Pakistan’s president, Imran Khan, has vocally and publicly defended the plight of Muslims around the world. As the president of a predominantly Muslim nation and as a Muslim himself, this makes sense. However, in regards to one of the biggest atrocities currently being waged against the Uyghur Muslims in China, Khan has said… nothing. Today, about a million Muslims are being held in detention camps in China. They’re being forced to denounce their religion and its practices, their language has been banned, and the women are being married off to Chinese men in an effort to eventually breed the Muslims out of existence. For a man who has positioned himself as a defender of Muslims around the world, his silence is notable. Khan has said that he’s dealing with the matter “privately” with Beijing, while another top Pakistani official called the situation a “nonissue.”
As of April 2021, according to the IMF, Pakistan currently owes China $24.7 billion, which makes up 27% of Pakistan’s total debt. This is up from 9% of Pakistan’s debt owed to China in 2013. That said, CPEC projects rolled out in Pakistan in 2015, so it makes sense for this number to be significantly higher. However, early reports indicate that the economic boon that these projects were supposed to bring have so far been less than what was projected and promised.
Furthermore, scattered and pending economic successes can only do so much for a nation that’s rife with its own internal issues. Pakistan suffers from government corruption, mismanagement of funds, and preferential treatment given to corporations and special interest groups. On top of that, Pakistan suffered astronomical economic losses due to its involvement in the War on Terror, so much so that the aid money given to Pakistan from the US barely made a dent. These things and more combine to create a situation where Pakistan is spending more than they’re earning. And so… they borrow more.
Since China has been working in Pakistan, several projects have been canceled due to unclear terms and conditions, preferential treatment given to Chinese businesses and workers particularly during contract negotiations, and exorbitant interest rates. Interest rates have been a problem for other participating nations, too. Since nations are finding it difficult to pay off their loans, China is getting creative with what they’ll accept as payment. For example, Sri Lanka leased one of its ports to China for 99 years because it couldn’t pay its billion-dollar debt. If you think 99 years is a long time, it’s really not. The drama over in Hong Kong right now is the direct result of one such deal that was struck back in 1989. China is making similar deals around the world, benevolently accepting ports and shipping lanes in lieu of payment, a move that has been likened to a new form of colonialism.
[THE US’ RESPONSE]
Recently, the Biden Administration, along with other G7 nations, announced a plan to rival the BRI. They’re calling it Build Back Better Latin America, which is expected to later be expanded to Build Back Better World. By tackling infrastructure projects across Latin America and the Caribbean, the US and its allies hope to counter China’s growing influence.
Over 100 countries are already involved in the BRI, which is more countries than are even in the Americas. However, Biden says that many of the BRI projects taking place in Africa, Asia, and Europe don’t hold much water, essentially calling them bad investments that won’t pay off for China in the long run. He doesn’t seem to be too worried about them.
The B3 Latin America and World projects have an opportunity to learn from China’s mistakes by making wiser and less risky investments in unstable nations. This could also be an opportunity for the US to clean up some of the drug-related problems that we helped to create in Latin American nations, which would theoretically help to reduce the number of migrants and asylum seekers at our border. Also, just as China may soon suffer the consequences of investing in unstable nations, the B3 projects should seek to stabilize other aspects of the nations’ governments and economies prior to or while completing infrastructure projects.
On top of all that, Biden’s Secretary of State, Antony Blinken, is attempting a diplomatic approach with China, seeking to work with them where their interests align and competing with them economically under established international rules and guidelines. These moves are said to indicate a shift in US policy - and money - away from “forever wars” like the one we just evacuated and towards long-term foundational investments.
As these two super nations face off in the battle for influence, some pundits and analysts worry that we’ll see a modern-day Cold War of sorts. It’s a reasonable comparison - the Cold War was “fought” primarily between the USSR and the US without either side actually declaring war on the other. It was a game of strategy with the US seeking to promote democracy and Soviets wanting to spread communism. Both sides believed the other side was inherently wrong and feared its proliferation. With that, they feared their own shrinking sphere of influence on the world, specifically among their potential allies.
The Cold War, coming hot off the heels of World War II, was a response to issues that hadn’t quite been resolved in the war. Warring parties were low on supplies, men, money, and morale. No one was looking to start that up again. Instead, a series of smaller proxy wars were fought with those warring parties being backed by either the US or the Soviets.
Now, people are fearful that in China’s apparent bid for global influence, the US will enter into another similar situation. Some argue that it’s unacceptable for the Chinese to obtain such wide support, but the US is already lagging behind China’s progress. The Biden administration is finally doing something to combat it now, but previous administrations did very little. For reference, the BRI was launched in 2013 during the second term of the Obama administration.
Personally, I think another proxy war scenario would be a hard sell to the American people, but since when does our elected government care what we want?
Do you guys remember the housing crash? I was watching a movie where Will Ferrell played an Icelandic guy who couldn’t stand American tourists in his country. I mean, that wasn’t his whole character, but he ends up having a few run-ins with some American college students, and he roasts them by saying, “I have some opiates for you, you can take while you over leverage your credit cards and you buy too many houses!”
The housing bubble happened because banks were giving out loans to people who were unlikely to pay them back. The bubble burst when people were unable to pay off their loans, leading to home foreclosures that flooded the market with a fresh new supply, which then drove housing prices down with the homes’ values eventually falling to less than the mortgages homeowners were paying on them. That’s a huge oversimplification, but you get the point.
It’s not good to give out bad-faith loans, even if the short-term gains seem worth it. In the case of the US housing crisis of 2008, President Bush and Fed Chair Ben Bernake had to bail out the mortgage and lending sectors of the housing market at an insane cost of $900 billion.
Is this analogy relevant to the BRI? It could be. China is investing in these countries with the expectation that they will perform better economically once the infrastructure projects are completed. At that point, China will be able to cash in on their investment - that is, if it ever gets to that point. As previously mentioned in the case of Pakistan, the great economic successes that were sold to the Pakistani government and people have been lacking in execution. A poor economy isn’t worth much to China, and it would mean a pretty dismal ROI for them. Conversely, China will have made a foothold in nations across the globe, spreading its influence, its form of government, its language, and its culture in the process. Honestly, that’s saying something for a nation that’s spent the majority of the modern era in relative isolation from the rest of the world.
Will President Biden’s rival plan put a damper in China’s mission, or is it already too little too late? While China was investing in sustainable energy, roads, bridges, and embassies in Africa, we wasted four years trying to bring back “clean coal,” which isn’t even a thing. If China follows the US model of pseudo-colonialism, they’ll set up military bases in these countries, which I’ll remind you, are already spread out across half of the globe. China’s leverage in global affairs will become much more significant in the future if they keep up this pace, especially if they do so uncontested. I want to be clear here - I’m not advocating for the US to do or not do anything. I’m just saying what could happen.
One way the US could potentially counter the progress that China has already made could be in the bureaucratic arena. As we talked about briefly, many of the economic promises of the BRI haven’t come to fruition in part because the nations involved need more help than just roads and bridges. Their governmental and economic systems are lacking, oftentimes causing more red-tape delays and hindrances than the better infrastructure can counteract. The irony with all of this is that the US can’t even pass our own infrastructure bill right now and our own systems are hanging on by a thread, but that’s a story for another day!
And that does it for this episode of Global Thread! I hope this one gave you some things to think about, and as always, you’re encouraged to read more on the topic and form your own opinions about it.
If you would like to read a transcript of this episode, you can do so at globalthread.org, and if you’d like to support me on Patreon, you can do that at patreon.com/GlobalThread.
Thanks so much for being here, and I’ll talk to y’all soon!