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Event Summaries
October 28, 2017

Event Summary: China’s Belt and Road Initiative

by
Henry Jackson Society

By Robert Clark

On the 18th October 2017 the Henry Jackson Society was honored to welcome to the House of Commons Jonathan Hillman, to discuss China’s Belt and Road Initiative, and wider geo-strategic implications in Asia and beyond. Chairing the event was The Rt Hon. Sir Hugo Swire MP, former Minister of State for Northern Ireland and former Minister of State for the Foreign and Commonwealth Office. His diplomatic experiences in Asia especially, along with the Henry Jackson Society’s Dr. John Hemmings, the Director at the Asia Studies Centre, provided for an experienced Chair to start the proceedings. Jonathan Hillman is the Director of the Reconnecting Asia Project at the Center for Strategic and International Studies in Washington DC, and was previously a policy adviser at the Office of the U.S. Trade Representative; his subject matter knowledge firmly established.

Hillman began his discussion by explaining the methodological framework of the Reconnecting Asia Project in relation to the various ongoing projects undertaken under the Belt and Road Initiative across China and Asia and into Europe. The main priority of the research was to establish the progress of these various infrastructure projects, tracking the accountability and contracting of them within their host nations. Acknowledged from the start the limitations imposed upon the project by the nature of the insurmountable task, Hillman nevertheless discussed certain projects in depth, but later went into more detail the more strategic aspects of these projects and their wider geo-political implications. The Khorgos dry port on the Kazak Chinese border was a case in point, and was useful to highlight both the strengths and weaknesses of the wider Belt and Road Initiative. A marvel of engineering, Khorgos dry port is about as far away from a coastline as one can get; despite this, it is far from completion and in real danger of stalling and not being finished in time. The satellite images in Hillman’s presentation of the sight in both 2010 and 2017 helped to illustrate this wider trend amongst other projects also.

China’s aim, it was argued, was to take advantage of changing global relations, especially the traditional trade routes which have historically been dominated by maritime routes. Indeed, 80% of global trade is still conducted by sea, yet with the Belt and Road Initiative encompassing new highways and economic corridors linking to these ports throughout south and south east Asia, it is not hard to see how in the not so distant future China will come to dominate these global trade lanes. It is of course an immensely ambitious project, not least the costings ($1 trillion promised by direct Chinese investment, while some suggest it could cost up to $4 trillion in total), but also the wider implications of these figures; with Chinese debt ever-increasing, what should happen to the host nations who are saddled with half completed projects and with little means to finance them themselves. Laos, for instance, has investment promised to it by China of up to half of its GDP. This then leaves these countries with a tremendous vulnerability, economically tied to China for the next thirty years. The implications of this economic and trade dependence are further highlighted when one considers how security is then intimately tied to the economic question of vulnerability. In Pakistan, there is the Chinese Pakistan Economic Corridor, a variety of large infrastructure and energy projects running the length of the Punjab south to the Baluch port of Gwadar. The majority of security concerns and terrorist attacks in Pakistan occur in the North West Tribal Areas and FATA, and so the eastern side, on the Indian border, is relatively risk averse in comparison.

Financial considerations aside, the Belt and Road Initiative throws some serious geo-strategic concerns into the equation also. Competing with Japan, which up until the last five years has been the regional provider of high quality infrastructure projects (especially in south east Asia), and India, which is the emerging power in the region regarding rail networks and transport projects, China has to be mindful of competing powers vying for control of these greatly significant global trade routes; a new Silk Road as described by many with the immense potential to open up Chinese and Asian markets to European trade and investment. Whilst acknowledging that the Chinese must remain realistic in their ambitions (indeed, they see these projects taking up to thirty years to complete), Hillman suggests that with the Belt and Road Initiative, it’s not who is in, but rather, who is out.