The Imperial Overreach of China’s Belt and Road Initiative

The Imperial Overreach of China’s Belt and Road Initiative

Xi Jinping’s signature foreign project is poorly defined, badly mismanaged and visibly failing

Pundits often describe today’s China as uber-strategic, seeing its every move as carefully coordinated, guided by history and focused on the long run. But Chinese leader Xi Jinping’s signature foreign-policy vision, the Belt and Road Initiative, is actually poorly defined and horribly mismanaged. As China pushes ahead with this colossal infrastructure-building spree, it is following in the footsteps of past empires and seriously overreaching.

The Belt and Road “is neither a Marshall Plan nor a geostrategic concept,” China’s top diplomat, Wang Yi, said in 2018. In fact, it is even more ambitious. The Marshall Plan harnessed the equivalent of $130 billion to rebuild Western Europe after World War II. Since the Belt and Road’s announcement in 2013, China has signed $460 billion in construction contracts across more than 140 countries, according to the American Enterprise Institute. The initiative now reaches into Africa, Latin America, cyberspace and even outer space. And as China is learning in place after place, it is much harder to develop economies than to rebuild them.

In the first place, Chinese officials will likely come to regret making Pakistan, in their words, the “flagship” of the Belt and Road Initiative, with some 40 projects, valued at an estimated $25 billion, under way there. Beijing believes that it can succeed in transforming the country after Washington has struggled for decades there. But it shouldn’t count on it.

In the 1950s, Western economists arrived in Pakistan and tried to help the newly independent country fashion a long-term development plan. But as poorly coordinated aid poured in, Pakistani officials resisted setting priorities and making difficult reforms. “When I went to Pakistan, I had the $60 million to spend and no plan, no program, nothing,” recalled John Bell, who oversaw U.S. foreign aid to Pakistan in the mid-1950s. Asked for a list of priorities, the head of Pakistan’s Economic Planning Ministry replied, “No, we need everything, we need everything.”

Intended to last 18 months, the foreign advisory mission launched more than a half-century ago essentially never ended. Eventually, the World Bank stepped in as well, and over the years, the U.S. has provided Pakistan with more than $80 billion in aid. Last year, the International Monetary Fund bailed out Pakistan for the 22nd time. If neighboring Afghanistan is the graveyard of empires, Pakistan is the black hole of foreign assistance.

Hubris partly explains why Chinese officials have bet big on Pakistan and other risky markets. China’s own rise, after all, has been fueled by dramatic infrastructure spending. Its top leaders have all ascended in a system that rewards GDP growth, which they have learned to boost through building infrastructure. After weathering the 2008 financial crisis, during which Western institutions struggled so visibly, Chinese leaders concluded that their playbook was superior and would work abroad.

In its zeal to build, China has backed projects that the U.S. wisely avoided long ago. In 1973, Pakistan asked the U.S. to build a port in Baluchistan, its largest and least-populated region, and offered to provide the U.S. Navy with access to it. “This would probably cost some hundreds of millions of dollars, and the political impact of the project will depend in part on its not being a white elephant,” Henry Kissinger cautioned in a memo that year to President Nixon.

Decades later, China granted Pakistan’s wish and built the port, but very little has arrived at its docks, which remain largely disconnected from urban areas inland. Meanwhile, China’s activities have angered India, which rejects the Belt and Road’s path through territory in the north that Pakistan and India both claim.

China faces even more checks on its power abroad than its imperial predecessors. In June, a Kenyan court ruled that China’s contract for a $3 billion railway between Nairobi and Mombasa was illegal because it violated public procurement practices. When Britain built the first railway between those cities more than a century ago, it didn’t have to contend with international standards, local courts, investigative reporters or cellphone cameras.
Belt and Road also suffers from a gross lack of transparency and accountability. China has no firm criteria for what qualifies as a project and keeps lending details secret. This allows Beijing to make friends in high places abroad, but it also raises the likelihood that commercially dubious projects will get the green light. And once Belt and Road projects are approved, China often struggles to monitor them.

On the ground, China’s massive state-owned enterprises, which include seven of the world’s 10 largest construction companies, run the show. These bloated giants often have more personnel, technical expertise and local relationships than the government officials charged with supervising them. Desperate to find new work, these firms want to build projects as soon as possible, regardless of their commercial viability or strategic value.

China’s loans extend its influence into foreign capitals, and critics warn that Beijing is using “debt trap” diplomacy, lending so that it can seize the recipient countries’ strategic assets. They point to a Sri Lankan port that China financed and built, for which it now has a 99-year lease—the same length that Britain once secured for its control of Hong Kong. No one needs to draw this connection for Sri Lankans, who won their independence from British colonial rule seven decades ago.

But the “debt trap” accusation is actually too generous to Chinese officials, casting Beijing’s embarrassing mismanagement as a strategic masterstroke. In Sri Lanka’s case, like other hot spots along the Belt and Road, Chinese officials lent recklessly to projects that other lenders avoided and are now scrambling to salvage what they can. When projects fail, Beijing suffers in both its finances and its reputation.

Indeed, China is walking into a trap of its own design. Globally, most large infrastructure projects cost more than expected, take longer than expected and deliver fewer benefits than expected, according to Oxford University researchers. To further raise the likelihood of failure, China has picked dangerous partners: Most countries participating in the Belt and Road have sovereign-debt ratings that are either junk or not rated.

The Covid-19 pandemic is exposing the difficulties that Chinese officials face in changing course. In June, China estimated that 20% of Belt and Road projects were “seriously affected” by the pandemic, while another 30% to 40% were “somewhat affected.” Bangladesh, Egypt and Tanzania had recently canceled or indefinitely postponed big-ticket projects. But incredibly, the Chinese official making the announcement was careful to note that China wasn’t aware of any major projects being canceled.

As in so many earlier imperial adventures, China is struggling to cut its losses, even as fewer new projects are announced. A debt crisis in emerging markets is looming, and historically, most infrastructure booms go bust. But the Belt and Road is enshrined in the Chinese Communist Party constitution like a tattoo gotten during a drunken binge. It cannot be removed or even called ugly. It is Mr. Xi’s vision, and until he leaves power or says stop, Chinese officials will march forward with it.

Mr. Hillman is the director of the Reconnecting Asia Project at the Center for Strategic and International Studies and the author of “The Emperor’s New Road: China and the Project of the Century,” recently published by Yale University Press.

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