Jyotirmai Singh
Physicist, Tinkerer
China’s Modern Silk Road
In 2013, Chinese Premier Xi Jingping announced the largest infrastructure investment effort in history, dubbing this grand project the Silk Road Economic Belt and 21st Century Maritime Silk Road. These initiatives aim at large investments by an economically resurgent China to bring forth dams, bridges, and ports throughout the Indian Ocean littoral and Eurasian heartland. The name is more than apt, as China is trying to do no less than recreate the Silk Road of the past that catalysed the transfer of goods and ideas between East and West and served as an unmatched tool for soft and hard power projection for the state that controlled it, like the Mongol Empire. While the Silk Road sprung organically, the modern Belt and Road Initiative (BRI) is a deliberate decision by China - inspired by the past - to enhance its influence in its immediate periphery and potentially extend it across Eurasia. BRI will do this primarily via economic investments that enhance integration and catalyse trade. However, as BRI ramps up, China’s neighbours rightfully worry about safeguarding their sovereignty against the negative consequences of its foray into regional development. Such consequences include excessive Chinese influence upon participant countries and debt traps from grandiose projects stuck in quagmires such as the Hambantota port in Sri Lanka.
To adequately discuss BRI, we must start with its historical inspiration, the Silk Road. The Silk Road was an extensive network of trade routes connecting the Chinese heartlands to the Mediterranean from the 2nd century BCE to the 18th. Initially spurred into existence by the Chinese monopoly on silk manufacture under the Han dynasty, the Silk Road gradually evolved into a catalyst for the exchange of goods and ideas across East and West.
It was also an engine of soft power projection; the Chinese monopoly of silk, which remained the most coveted luxury in Eurasia for centuries, did much to elevate the perception of its civilisation. The contemporary preponderance of Buddhism - a South Asian faith - in East Asia also owes significant thanks to the Silk Road, which served as a catalyst for the transmissions of Mahayana, Theravada, and Tibetan Buddhism throughout Eurasia. Central Asia, although primarily ethnically Turkic today with the exception of Tajikistan (which is primarily Iranian), presents a unique mélange of Islamic, Persian, and Turkic traditions. Islam is the dominant faith of the region, yet Nowruz - the pre Islamic Persian New Year festival - is still celebrated in each of these countries. The name has also remained almost unchanged, being Nowruz in Turkmen, Navr’oz in Uzbek, Нооруз (Nooruz) in Kyrgyz, and Наурыз (Naurız) in Kazakh. Christianity also benefited from the Silk Road, reaching the apex of the Mongol Empire with Sorghaghtani Beki, Genghis Khan’s daughter in law who took key policy decisions in the 13th century to usher in a more cosmopolitan Mongol Empire. Although herself Nestorian Christian, Sorghaghtani Beki instilled tolerance in her sons who later - as Great Khans of the largest contiguous empire in history - promulgated the notion of state over religion from the Mediterranean to the Pacific. This control over the entire Silk Road and its vibrant flow of goods and ideas benefitted the Mongol economy immensely. The Mongols in turn reciprocated by using their authority to catalyse trade and integration across Eurasia - for instance through their efficient postal services. This illustrates the remarkable symbiosis between the Silk Road and Pax Mongolica, and crucially the immense soft and hard power possibilities that leveraging control over the entire Silk Road could give.
Given the immense geopolitical potential of connecting East and West and controlling that connection, it is hardly a surprise that a resurgent China would wish to (re)mobilise the Silk Road to expand its influence across Eurasia. Today’s China enjoys benefits that its Han predecessor did not, such as controlling ~20% of global manufacturing output and being the key node in global supply chains. All this gives China’s BRI project immense potential. With this in mind, it is easy to identify two critical objectives of BRI. The first is stated clearly by one of Beijing’s mouthpieces: “[BRI] aims to promote … highly efficient allocation of resources and deep integration of markets by enhancing connectivity of Asian, European, and African continents and their adjacent seas”. That there are economic benefits possible from such integration is certainly true, as evidenced by the positive impacts of Pax Mongolica and the Silk Road. Notable also is the inclusion of Africa, which indicates China’s ambition. As we will see, the Chinese are very serious about outdoing the Mongols and getting deeply involved in Africa. The second objective, which China routinely downplays but analysts repeatedly emphasise, is the expansion of its influence by using BRI as a conduit for soft and hard power projection. In this respect, we must be careful to not assign malignant intentions to China, as western analysts are prone to do. Beijing is simply pursuing a course of action expected of a civilisation state with a long and proud history riding a resurgence back to the upper echelon of the global order.
China is implementing these objectives through BRI primarily via infrastructure and development investment in target countries.
Notably, the distribution of countries signed up to BRI includes not only Eurasia and Africa, but also Latin America.
However, geopolitics dictates that the most important BRI projects remain those in Eurasia and along the Indian ocean littoral. Eurasia is home to the vast majority of the world's population and thus affords the largest potential for global integration. As it relates
to Chinese prestige, Eurasia is also home to the most critical constested spheres of influence, such as the Middle East, Southeast Asia, and Central Asia. Gaining a foothold in these critical theatres will do much to enhance China's
position vis-à-vis the United States and challenge its role as the global hegemon. The advance into Latin America, while a notable advance on the historical blueprint provided by the Han and Mongol Empires, is currently not as significant since Latin America remains a mostly uncontested US sphere of influence for the time being. Turning to Eurasia then, the most prominent examples of BRI projects include the CPEC in Pakistan and the wholesale construction of ports
along the Indian ocean to advance the Maritime Silk road.
The China-Pakistan Economic Corridor, or CPEC, is a major pillar of the overland Silk Road whereby China is investing extensively in transport and infrastructure projects in Pakistan. This includes a vast network of highways and railways that will replace Pakistan’s current dilapidated transport networks. The Karakoram Highway from Punjab to the Chinese border will be completely rebuilt, and its railway network will eventually be extended to join the Southern Xinjiang Railway in Kashgar - an oasis city which has been a transit point between Central and East Asia for centuries.
In addition, the CPEC also includes various energy projects targeting coal and renewable energy. Initially valued at $46 billion, as of 2017, the value of CPEC investments is at $62 billion. The initial figure of $46 billion was equivalent to the cumulative FDI into Pakistan since 1970 and was 17% of Pakistan’s 2015 GDP. The CPEC has been considered analogous to the Marshall Plan in its impact on Pakistan’s economy and from its size relative to Pakistan’s economy it is no surprise why. Pakistani officials estimate that the CPEC will generate approximately 2 million jobs and add 2-2.5 percentage points to annual GDP growth. The CPEC culminates in the port of Gwadar that the Chinese are constructing on the Indian Ocean. This is absolutely vital, as it reveals the key benefit Beijing receives for its largesse - an alternate corridor to the Indian Ocean that bypasses the Strait of Malacca. This makes China less vulnerable should an adversary attempt to target it by blocking Malacca - through which 80% of China’s energy exports go currently. Therefore the CPEC gives a massive boost to the Pakistani economy, which enables it to engage in more trade with China, and creates an alternate channel for China’s energy imports. This explains the pragmatic value of the CPEC to Beijing, while the prestige boost that such a Marshall Plan-esque undertaking provides also cannot be understated, particularly if it succeeds.
In addition to Gwadar, China has invested extensively in ports along the Indian Ocean. These include investing in the Chittagong port in Bangladesh and constructing the port of Hambantota from scratch in Sri Lanka. Between 2015 and 2017, China has negotiated leases for the following ports:
- Gwadar, Pakistan: 40 years
- Kyaukpyu, Myanmar: 50 years
- Kuantan, Malaysia: 60 years
- Obock, Djibouti: 10 years
- Hambantota, Sri Lanka: 99 years
- Muara, Brunei: 60 years
- Feydhoo Finolhu, Maldives: 50 years
Putting this list onto a map helps explain China's thinking behind this strategy:
Seeing these on a map of the Indian Ocean, the Chinese strategy of reestablishing a maritime Silk Road becomes even more apparent. Of special note is Chinese presence in Djibouti, which is its first overseas military base and is
strategically located right by the Bab-el Mandeb strait. While not as critical as Hormuz or Malacca, Bab-el Mandeb is nevertheless important due to its role as the entrance to the Red Sea and Gulf of Aqaba. It is worth making a quick mention here of the significant investment China is making in the whole of Africa, not just Djibouti. For example, China is financing in part the construction of Egypt’s new capital. Furthermore, the Mombasa-Nairobi Standard Gauge Railway (SGR) in Kenya, which at $3.6 billion is Kenya’s most expensive infrastructure project since independence, was built and is operated by Chinese companies (which hired 25000 Kenyan workers to actually build the railway). Therefore we see that on the broader Indian ocean front also China has begun to project both soft and hard power - the former in the form of economic assistance in building ports all along the Indian ocean and its extensive infrastructure development in Africa, and the latter as exemplified by its military base in Djibouti.
Amidst this flurry of development activity, some of China’s partners have become wary of what they see as an effort by Beijing to use BRI as a springboard to exercise an unduly high influence on their internal politics. The most notable critique has been accusations of Beijing employing debt-trap diplomacy to gain footholds in strategic countries. The Hambantota port was built in part on loans that the Chinese gave to Sri Lanka at a 6.3% interest rate. Sri Lanka’s inability to service this debt was ultimately the critical factor that led to its leasing the port to China for 99 years. Countries such as the US and Japan have raised concerns over this as the port at Hambantota could be used as a Chinese naval base, giving China a critical boost in the geopolitically vital Indian ocean region. In Kenya, the Chinese operated Mombasa-Nairobi SGR and was also built after significant loans from China that the Kenyan government may not be able to pay back. In return, it may have to lease out its biggest port at Mombasa to China. After his inauguration in 2018, Malaysian Prime Minister Mahathir Mohamad cancelled oil and gas pipelines projects worth approximately $2.8 billion with the China Petroleum Pipeline Bureau out of concern that Malaysia could not repay its debt obligations. Mohamad and Finance Minister Lim Guan Eng criticised the projects, claiming that they were expensive and unnecessary and had opaque bidding processes that favoured Chinese firms. Malaysia was also concerned about becoming a piece of China’s String of Pearls, with its Deputy Defense Minister stating that “You look at a map and you can see the places where China is plotting ports and investments... What’s crucial to all that? Our little Malaysia, and the Malacca Strait. I say publicly that we do not want to see warships in the Strait of Malacca or the South China Sea.” It is clear that Chinese largesse has had negative consequences, resulting in expensive and lossy projects that serve as a springboard for greater Chinese control. Due to this, the response to BRI has not been uniformly positive and has been met with some wariness, even from China’s partners.
China’s intentions with its BRI project are by now clear. Looking to the past, Beijing has realised the immense potential of reviving the Silk Road and, critically, controlling it. By successfully implementing BRI, Beijing hopes to exceed what the Han Dynasty and Mongol Empire achieved centuries ago and leverage its role as the world’s workshop to reestablish the link between East and West. Furthermore, it hopes to use its modern Silk Road as a conduit to project soft and hard power throughout not only Eurasia but also Africa and Latin America. Projects such as the CPEC and Beijing’s extensive investments in ports across the Indian ocean - including especially its base in Djibouti - are a concrete sign of Beijing’s commitment to President Xi’s vision of a modern Silk Road. Beijing’s largesse has been the target of some suspicion from its partners over fears of using BRI development projects as ploys to gain undue influence. This is especially true in geopolitically important countries such as Sri Lanka and Malaysia that are central to China’s String of Pearls strategy. Overall, however, BRI is likely to proceed mostly unhindered over the next few decades as China begins to flex its influence over its neighbourhood. With this, China will ultimately aim to construct a viable vision of a Pax Sinica as it begins to (re)assert itself on the global stage, most probably with the
intention of presenting it as a legitimate alternative to the moribund Pax Americana of today.