China’s Belt and Road Initiative: Strategic and Economic Impacts on Central Asia, Southeast Asia, and Central Eastern Europe 9780367515904, 9781003054597

This edited volume presents a trans-disciplinary and multifaceted assessment of the strategic and economic impacts of Ch

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China’s Belt and Road Initiative: Strategic and Economic Impacts on Central Asia, Southeast Asia, and Central Eastern Europe
 9780367515904, 9781003054597

Table of contents :
Half Title
Series Information
Title Page
Copyright Page
Table of contents
1 Making analytic sense of the Belt and Road Initiative: A plea for multi- and trans-disciplinary approaches and eclecticism
The BRI basket: policies and tools
How to make analytic sense of the BRI? A plea for theoretical pluralism
Scope and aims of this book
2 The Belt and Road Initiative post-April 2019: Plus ça change!
The BRI as a platform
The BRI’s progress in South Asia
Sri Lanka
India needs to respond
Chinese engagements in Africa
Looking to the future
3 Thoughts on appropriate approaches to studying BRI’s actual impacts and limits
A critical discussion of China-centric approaches
Theoretical framework
Empirical evidence and its connection to the above hypotheses
The importance of government support from BRI recipient states
The importance of policy coordination and linking
Legacy and continuity
The importance of a local champion in BRI recipient states
Other generic hypotheses
4 The Chinese Belt and Road Initiative and its impact on democratization and de-democratization processes
The globalization of authoritarianism: the role of China
The role of China in political conflicts in the literature
The rise of China as a hegemonic transition: a view from world-systems theory and neo-Gramscian political thought
The erosion of democracy in the semi-periphery: a neo-Gramscian view
Empirical examples
5 China’s faltering normative power drive in Kazakhstan
China’s normative power drive in Kazakhstan
China-Kazakhstan economic cooperation
Chinese BRI and Chinese investments in Kazakhstan: positive versus negative perceptions
Sinophobia in Kazakhstan: projection of social problems or “primordial” nationalism?
Discussion and conclusion
6 Malaysia and China’s Belt and Road Initiative: A trilogy of commitment problem, diplomacy, and strategic foreign policy
Commitment problems and diplomacy
Modelling the diplomatic game
7 Chinese grand strategy and the Belt and Road Initiative: The case of Southeast Asia
A grand strategy “with Chinese characteristics”?
Grand strategy on the ground
Mobilization of capacities
Geopolitical objectives
Military influence
Agenda-setting, norms, and strategic narrative
Economic, social, environmental, and security challenges
8 The BRI, logistics, and global infrastructure: New world order, the game of Go, and the disposition of Shi
Where is Taiwan in the picture of the global web?
Logistics and strategic chokepoints
IR with Chinese characteristics, the game of Go, and the disposition of Shi (.)
Tianxia and its reproduction system
9 China and the USA in Central Asia: Competing actors with different goals?
Central Asia in the era of the Belt and Road Initiative
Mapping interests and strategies through comparison – China
Evolving regional policy
Political and security relations
Economic relations and trade
Other areas of cooperation
Mapping interests and strategies through comparison – the United States
Sovereignty, independence, and territorial integrity
Political and security relations
Economic relations and trade
Other areas of cooperation
10 Rail development potential in Asia in the frame of the Belt and Road Initiative: What market?
China: actively promoting rail routes
Actual development corridors?
Typology of development corridors
The rise of a diversified offer
Commercial viability of long-distance rail services
A major development lever in the eyes of governments
Commercial and financial uncertainties
11 From railway dreams to a reality check: Achievements and challenges of Sino-Polish relations at the local level – the case o
Sichuan–Europe railway connection and the development of Lódzkie–Sichuan institutional ties
Lódzkie-Sichuan cooperation and Polish foreign policy pronouncements
Towards the reality check? Challenges ahead for the cooperation
A Central European hub that did not arise: between local, central, and global constraints
12 Economic (policy) implications of the Belt and Road Initiative for Central, East, and Southeast Europe
The BRI in Europe: focus on the 17+1
Filling the infrastructure investment gap in Southeast Europe
Chinese and EU instruments for infrastructure development in “BRI sectors”
Expected economic benefits of the BRI for CESEE
Uncertainties and risks should not be neglected
The way forward to maximize the benefits of the BRI
Conclusion: setting up a level playing field

Citation preview

China’s Belt and Road Initiative

This edited volume presents a trans-​disciplinary and multifaceted assessment of the strategic and economic impacts of China’s Belt and Road Initiative (BRI) on three regions, namely Central Asia, Southeast Asia, and Central Eastern Europe. The contributions to this book demonstrate the requirement of a more realistic view concerning the anticipated economic benefits of the New Silk Road. The contributors critique the strategic effects of China’s opaque long-​ term grand strategy on the regional and global political order. Specific countries that are covered are Finland, Hungary, Kazakhstan, Malaysia, Poland, and Thailand. Additionally, case studies from South Asia and Africa, notably India and Ethiopia, enable insightful comparisons. Encouraging readers to critically challenge mainstream interpretations of the aims and impacts of the BRI, this book should interest academics and students from various disciplines including Political Science, International Relations, Political Geography, Sociology, Economics, International Development, and Chinese Studies. Alfred Gerstl is a specialist on International Relations in Southeast Asia. Since 2019 he holds a Marie Skłodowska-​Curie Individual Fellowship at the Department of Asian Studies at Palacký University in Olomouc (Czech Republic). Ute Wallenböck is a postdoctoral researcher for the EU-​funded “Sinophone Borderlands  –​Interaction at the Edges” project at Palacký University Olomouc, and assistant professor for Chinese Studies at Masaryk University, Brno, both in the Czech Republic.

Rethinking Asia and International Relations Series Editor –​Emilian Kavalski Li Dak Sum Chair Professor in China-​Eurasia Relations and International Studies, University of Nottingham, Ningbo, China

This series seeks to provide thoughtful consideration both of the growing prominence of Asian actors on the global stage and the changes in the study and practice of world affairs that they provoke. It intends to offer a comprehensive parallel assessment of the full spectrum of Asian states, organizations, and regions and their impact on the dynamics of global politics. The series seeks to encourage conversation on: •

what rules, norms, and strategic cultures are likely to dominate international life in the ‘Asian Century’; • how will global problems be reframed and addressed by a ‘rising Asia’; • which institutions, actors, and states are likely to provide leadership during such ‘shifts to the East’; • whether there is something distinctly ‘Asian’ about the emerging patterns of global politics. Such comprehensive engagement not only aims to offer a critical assessment of the actual and prospective roles of Asian actors, but also seeks to rethink the concepts, practices, and frameworks of analysis of world politics. This series invites proposals for interdisciplinary research monographs undertaking comparative studies of Asian actors and their impact on the current patterns and likely future trajectories of international relations. Furthermore, it offers a platform for pioneering explorations of the ongoing transformations in global politics as a result of Asia’s increasing centrality to the patterns and practices of world affairs. For more information about this series, please visit:  https://​www.​Rethinking-​Asia-​and-​International-​Relations/​book-​series/​ ASHSER1384 Recent title The Asian Infrastructure Bank Power, Interests and Reputation Ian Tsung-​yen Chen

China’s Belt and Road Initiative Strategic and Economic Impacts on Central Asia, Southeast Asia, and Central Eastern Europe Edited by Alfred Gerstl and Ute Wallenböck

First published 2021 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 52 Vanderbilt Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2021 selection and editorial matter, Alfred Gerstl and Ute Wallenböck; individual chapters, the contributors The right of Alfred Gerstl and Ute Wallenböck to be identified as the authors of the editorial material, and of the authors for their individual chapters, has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-​in-​Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-​in-​Publication Data A catalog record has been requested for this book ISBN: 978-​0-​367-​51590-​4  (hbk) ISBN: 978-​1-​003-​05459-​7  (ebk) Typeset in Times New Roman by Newgen Publishing UK The work on this edited volume was supported by the European Regional Development Fund Project Sinophone Borderlands –​Interaction at the Edges (CZ.02.1.01/​0.0/​0.0/​16_​019/​0000791) (Ute Wallenböck and Yu-​Wen Chen) and a Marie Skłodowska-​Curie Individual Fellowship (CZ.02.2.69/​0.0/​0.0/​18_​070/​0010285) (Alfred Gerstl).


List of illustrations  List of contributors  List of abbreviations  1 Making analytic sense of the Belt and Road Initiative: a plea for multi-​and trans-​disciplinary approaches and eclecticism 

vii ix xiv



2 The Belt and Road Initiative post-​April 2019: plus ça change! 



3 Thoughts on appropriate approaches to studying BRI’s actual impacts and limits 


YU -​WE N  C H E N

4 The Chinese Belt and Road Initiative and its impact on democratization and de-​democratization processes 



5 China’s faltering normative power drive in Kazakhstan 



6 Malaysia and China’s Belt and Road Initiative: a trilogy of commitment problem, diplomacy, and strategic foreign policy  FARI Z AL MOHD R A ZA LLI


vi Contents

7 Chinese grand strategy and the Belt and Road Initiative: the case of Southeast Asia 



8 The BRI, logistics, and global infrastructure: new world order, the game of Go, and the disposition of Shi 


J OYC E C.  H . LI U

9 China and the USA in Central Asia: competing actors with different goals? 



10 Rail development potential in Asia in the frame of the Belt and Road Initiative: what market? 



11 From railway dreams to a reality check: achievements and challenges of Sino-​Polish relations at the local level –​the case of Łódzkie-​Sichuan partnership 



12 Economic (policy) implications of the Belt and Road Initiative for Central, East, and Southeast Europe 






Figures 3.1 Hypotheses related to the formation of strategic action field(s) for the Belt and Road Initiative  48 5.1 Quantity of media reports on the BRI and China in Kazakhstan in 2013–​2019  90 5.2 Media discourse on the BRI in Kazakhstan in 2013–​2019  91 5.3 Media discourse in Kazakhstan on investment contracts signed with China  93 5.4 Topics of media discourse on Sinophobia in Kazakhstan in 2013–​2019  95 6.1 An eustress model that satisfies the parameters of the “game” 114 6.2 A distress model that dissatisfies the parameters of the “game” 115 8.1 The signs of China Jiangsu International Economic & Technical Cooperation Group in Addis Ababa  144 8.2 A mall in Addis Ababa  145 8.3 A hotel amidst a local slum in Addis Ababa  146 8.4 A half constructed building in Addis Ababa  147 8.5 The poor in the streets with advertising boards of logistics in Addis Ababa  148 12.1 Substantial investment needs in CESEE  214

Maps 1.1 The Belt and Road Initiative  10.1 Belt and Road Initiative rail links: network (2018) and railway construction projects  12.1 Estimated GDP impact of infrastructure investment financed by Chinese loans, contrasted with current GDP per capita levels  12.2 Estimated cumulated GDP impacts of infrastructure investment, financed by EU grants and loans 

9 185 218 220

viii  List of illustrations

Tables 8.1 Diplomatic relations with China and BRI investments from China  10.1 Volume of container rail traffic between Asia and Europe: traffic through the network of Russian, Kazakh, and Belarussian operators  11.1 Chengdu-​Łódź train occupancy rates, 1 July until 30 August 2019 

150 182 203


Editors Alfred Gerstl is a specialist on International Relations in Southeast Asia. Since 2019 he holds a Marie Skłodowska-​Curie Individual Fellowship at the Department of Asian Studies at Palacký University in Olomouc (Czech Republic). As part of this fellowship he researches on the strategic and economic impacts of the Belt and Road Initiative on Southeast Asia (including the South China Sea dispute) and Central Eastern Europe. From July to December 2018 he was employed as postdoc researcher in the EU-​ funded project “Sinophone Borderlands –​Interaction at the Edges”, also at Palacký University. Alfred is also adjunct professor at the University of Vienna and president of the Central European Institute of Asian Studies (CEIAS), a transnational think tank. He previously lectured at universities in Australia, Austria, the Czech Republic, Germany, and Russia (inter alia, as associate professor at Novosibirsk State University in 2018/​19). Ute Wallenböck is a postdoctoral researcher for the EU-​funded “Sinophone Borderlands  –​Interaction at the Edges” project at Palacký University Olomouc, and assistant professor for Chinese Studies at Masaryk University, Brno, both in the Czech Republic. Her expertise covers the cultural and educational impact of the New Silk Road on the various ethnic groups at the Sino-​Tibetan borderlands.

Contributors Yu-​Wen Chen is professor of Chinese Studies at the University of Helsinki in Finland and hosting professor of Asian Studies at Palacký University in the Czech Republic. She serves as editor-​in-​chief of Asian Ethnicity (Routledge) and one of the Editors of the Journal of Chinese Political Science (Springer). Chen is the academic liaison for the University of Helsinki at the Nordic NIAS Council based in Denmark as well as the Nordic Center in Fudan University, China. She is currently serving as the chair of the board of Nordic Association for China Studies (NACS) until 2021 as well

x  List of contributors as representing Finland in “COST ACTION:  China in Europe Research Network” (European Cooperation in Science & Technology funded by EU Horizon 2020). Chen formerly held academic positions at Nazarbayev University (Kazakhstan), University College Cork (Ireland), and Academia Sinica (Taiwan). In 2011, she provided testimony in the public hearing of the US-​China Economic and Security Review Commission on “China’s Foreign Policy: Challenges and Players” in Washington, DC. Jeremy Garlick is an assistant professor at the Jan Masaryk Centre of International Studies of the University of Economics Prague. He specializes in China’s international politics and economic statecraft, but also teaches courses in international relations and global power politics. Dr Garlick spent three years working at universities in China, including the University of the Chinese Academy of Sciences (UCAS). Prior to that, he taught in South Korea for five years. His research focuses on the regional impacts of China’s Belt and Road Initiative, especially in Pakistan and Central and Eastern Europe, but also in Central Asia, South Asia, and the Middle East. He has published peer-​reviewed papers on various aspects of China’s international relations in prestigious journals such as Journal of Contemporary China, Europe-​Asia Studies, and Asia Europe Journal. In December 2019 his book The Impact of China’s Belt and Road Initiative: From Asia to Europe was published by Routledge. Dr Garlick is the principal investigator in a Czech Science Foundation (GAČR) research project about the multifaceted economic diplomacy of China’s Belt and Road Initiative which runs from 2019–​2021. Julia Gruebler is an Economist at the Vienna Institute for International Economic Studies (wiiw) and external lecturer at the Vienna University of Economics and Business (WU). Her research focuses on international (trade) relations with special emphasis on the policies of the European Union and its member states. Linyan Huang is a doctoral student and research assistant in the Department of Geography at Laval University (Quebec). She holds a Master’s degree in Business Administration from Tongji University (Shanghai). Her doctoral research focuses on Chinese policy and Chinese interest in Arctic shipping. Her area of research covers the geopolitics of China in the Arctic, the Chinese interest in maritime trade in the Arctic, the Chinese maritime industry, and the Chinese New Silk Road project. She is a student member of the Quebec Council for Geopolitical Studies and an associate researcher in the Genesys network on geopolitical studies. She is also a member of the ArcticNet network. Alica Kizeková is a Senior Researcher at the Institute of International Relations in Prague in the Czech Republic and a Guest Lecturer at the Faculty of Society and Design at Bond University in Queensland in Australia. Previously, she was an Advisor to the Speaker of the Chamber

List of contributors  xi of Deputies of the Czech Parliament in Prague and a Head of Department of Asian Studies at Metropolitan University Prague. Her research interests include the Shanghai Cooperation Organization, Russian and Chinese regional politics, Central Europe, regionalism and great power relations in the Greater Central Asia and the Indo-​Pacific, multitrack diplomacy, security, and soft balancing. She is the author of Soft Balancing in the Indo-​Asia-​Pacific: From ASEAN to the Shanghai Cooperation Organization (Routledge, forthcoming 2020). Bartosz Kowalski is assistant professor at the Department of East Asian Studies of the University of Łódź and researcher in its Center for Asian Affairs. His research focuses on China’s foreign policy (including Sino-​ Central European relations), China and the developing world, and modern Xinjiang political history. He is currently working on a book on China’s strategic partnerships with the Czech Republic, Hungary, Serbia, and Poland. Frédéric Lasserre holds a Master of Commerce (ESC Lyon, 1990), an MBA (York University, Toronto, 1991), a DEA in Geopolitics (University Paris VIII, 1992) and a PhD in Geography (University Saint-Étienne, France, 1996). He worked as a consultant with the European Observatory of Geopolitics (OEG, Lyon, France) on the political and economic transformations of Central and Eastern Europe after the fall of the Berlin Wall, then as a foreign language instructor in Japan, then as advisor in international affairs on the Asian desks at the Quebec Ministry of Trade and Industry; and then with Investissement Québec, the Crown corporation responsible for the promotion of foreign investment in Quebec. Since 2001 he is professor at the Department of Geography at Laval University (Quebec City). He chairs the Conseil québécois d’Études géopolitiques (Quebec Council for Geopolitical Studies, CQEG) at Laval University, where he coordinates research programs about Arctic and Asian geopolitics. With his book L’éveil du dragon. Les défis du développement de la Chine au XXIe siècle (Presses de l’Université du Québec) [The awakening of the dragon. The challenges of development in China in the 21st century], he won the HEC Best Business Book Award 2006. Joyce C. H. Liu is chair professor, Institute of Social Research and Cultural Studies, National Chiao Tung University, Taiwan. Currently, she is the director of the International Center for Cultural Studies and the director of the International Program of Inter-​Asia Cultural Studies of the University System of Taiwan. She was the founding director of the first Comparative Literature Program in Taiwan at Fu Jen Catholic University in 1994, the founding director of the Institute of Social Research and Cultural Studies at NCTU in 2001, the founding director of the International Center for Cultural Studies NCTU in 2013, and the president of the Cultural Studies Association in Taiwan (2002–​2004). Her research focuses on biopolitics,

xii  List of contributors border politics, migration, unequal citizens, critical logistics, new colonialism, internal colonialism, artistic intervention, and epistemic decolonization project. Farizal Mohd Razalli is currently a faculty member at the Center for Politics, History, and International Affairs at Universiti Kebangsaan Malaysia (UKM), Malaysia. He was formerly the Head of the International Relations department between 2015 and 2017. Since 2015, he has been involved in various policy works with China’s policy think tanks and research institutions in Beijing, Fujian, Nanning as well as Dalian. Being a policy strategist, he has been a consultant to the World Bank and Timor Leste Ministry of Foreign Affairs, along with various Malaysian institutions namely the Parliament, the Prime Minister’s Office, and Securities Commission. Farizal specializes in foreign policy and diplomacy with regional focus that includes Southeast Asia (with China), South America, and Western Europe. His contemporary research works revolve around energy policy, strategic negotiations, technology-​security nexus, governance-​sustainability, as well as formal modelling and statistical analysis in international politics. Éric Mottet is a professor of Geopolitics at Quebec University in Montreal, Canada (Université du Québec à Montréal, UQAM). He is currently assistant director of the Quebec Center of Geopolitics Studies (Centre québécois d’études géopolitiques, CQEG). His research interests include international relations, regional integration, and exploitation of natural resources in Asia. Author of many articles and books, Éric recently published La Chine et le Monde. Quelles nouvelles relations, quels nouveaux paradigmes? (2015) [China and the World. What new Relations, What new Paradigms]; Assessing Maritime Disputes in East Asia: Political and Legal Perspectives (2017); Géopolitique de la mer de Chine: eaux troubles en Asie du Sud-Est (2017) [Geopolitics of the China Sea]; Mondialisation et connectivité: les enjeux du commerce, de l’investissement et du travail au 21e siècle (2019) [Globalization and Connectivity]; Les nouvelles routes de la soie. Géopolitique d’un grand projet chinois (2019) [The new Silk Roads. Geopolitics of a major Chinese project], and Manuel de géopolitique. Enjeux de pouvoir sur des territoires (2020) [Geopolitical Handbook. Power stakes over territories]. Vijay K.  Nambiar is honorary fellow at the Institute of Chinese Studies in Delhi and book review editor of the China Report. He is member of the board of trustees of the United Nations Institute for Training and Research (UNITAR) and chair of its finance committee. He served in the Indian Foreign Service from 1967 to 2004, and as Deputy National Security Advisor to the Government of India (2005/​2006). He also served from 2006 to 2016 in the United Nations, New York as Under Secretary General. Since retirement, he lives in Delhi.

List of contributors  xiii Kimberly Orinx is a PhD candidate and teaching assistant at Université Catholique de Louvain (Belgium). Her research focuses on cyberspace and the China-​ Russia-​ United States triangle. She holds an LLM in International Law from the Free University of Brussels and two Master’s degrees in International Relations from Tongji University (Shanghai, China) and the Free University of Brussels. Wolfram Schaffar is professor for Japanese Studies at the University of Tübingen, Germany. Prior to this position, he served as professor for development studies and political science at the University of Vienna, as lecturer at the Department of Southeast Asian Studies, University of Bonn, and at the Faculty of Political Science, Chulalongkorn University in Bangkok. His fields of interest are state theory of the Global South, social movements, new constitutionalism and democratization processes, as well as new authoritarianism  –​with a regional focus on East and Southeast Asia. Gaziza Shakhanova is a PhD candidate, Jan Masaryk Centre for International Studies, University of Economics in Prague. She graduated from the State University of Management (Moscow), Faculty of World Economy. Between 2001 and 2016 she worked for a number of the Kazakh ministries and state-​ owned organizations. In 2016, she entered a PhD program at Jan Masaryk Centre for International Studies, University of Economics in Prague. Her research interests include the Russia-​Central Asian region and the postcolonial studies of Russia and Kazakhstan. Her recent publication are “The Belt and Road Initiative and the Eurasian Economic Union: Exploring the ‘Greater Eurasian Partnership’ ” (together with Jeremy Garlick, 2020)  in Journal of Current Chinese Affairs, “Being in Close Neighborhood with Russia: Kazakhstan’s State-​Framed Identity and Latinization of the Script –​ An Attempt for Creating Own Subalternity?” (2020) in Journal of Central Asian Studies, and “The Architecture of Security in the Eurasian region: Is Russia Still a Guarantor of Regional Security?” (2017) in East West Studies. Robert Stehrer is the scientific director at the Vienna Institute for International Economic Studies (wiiw). His expertise covers a broad area of economic research, ranging from international integration, trade and technological development to labor markets and applied econometrics. His recent work has focused on the analysis and effects of internationalization of production and value-​added trade on economic performance and labor markets. Tanguy Struye de Swielande is a professor of International Relations at Université Catholique de Louvain (Belgium). He is the founder of the Genesys Network and the director of the Center for the Study of Crisis and International Conflicts. He is also a research fellow at the Egmont Institute and guest lecturer at the Belgian Royal Military Academy. His research focuses on US-​China relations, Indo-​Pacific, power, geopolitics, and geo-​economics.



1Malaysia Development Berhad China’s cooperation with Central Eastern European countries Asian Development Bank Agricultural Development Bank of China Agence Française de Développement Asian Infrastructure Investment Bank Association of Southeast Asian Nations African Union Bangladesh-​China-​India-​Myanmar Economic Corridor Belt and Road Initiative Brazil, Russia, India, China, and South Africa Central Asia plus USA platform Central Asia Data-​Gathering and Analysis Team China Africa Research Initiative Chinese Academy of Social Sciences China Development Bank China Communications Construction Company Communist Party of China China Central Television Council of Europe Development Bank Central and Eastern Europe Central and Eastern European countries Connecting Europe Facility Central European Institute of Asian Studies Central, East, and Southeast Europe Coalition for Fair Fisheries Arrangements China General Nuclear Power Company China Investment Corporation Commonwealth of the Independent States Cohesion Fund City of London Corporation China’s National Development and Reform Commission

List of abbreviations  xv CP Charoen Pokphand Group CPEC China-​Pakistan Economic Corridor CREC China Railway Group CRIG China Railway International Group CSIS Center for Strategic and International Studies CSTO Collective Security Treaty Organization COSCO China Ocean Shipping Company DOC Department of Commerce (US) DOS Department of States (US) EBRD European Bank for Reconstruction and Development EEC European Economic Community ECRL East Coast Rail Link EAEU Eurasian Economic Union EIB European Investment Bank EIF European Investment Fund EFSI European Fund for Strategic Investment ERDF European Regional Development Fund ESIA Environmental and Social Impact Assessment ESIF European Structural and Investment Fund EU European Union Exim Bank Export-​Import Bank of China FOIP Free and Open Indo-​Pacific FTA Free Trade Agreement GDP Gross Domestic Product GE General Elections (Malaysia) GMS Greater Mekong Sub-​Region ICBC Industrial and Commercial Bank of China ICT Information and Communication Technology IMF International Monetary Fund IR International Relations IPA Instrument for Pre-​accession Assistance KfW Kreditanstalt für Wiederaufbau KTZ Kazakhstan Temir Joly ŁSSE Łódź Special Economic Zone MFA Ministry of Foreign Affairs MNCs Multinational Corporations MoU Memorandum of Understanding MPAC Master Plan on ASEAN Connectivity MSR 21st-​century Maritime Silk Road NDB New Development Bank NDRC National Development and Reform Commission NGO(s) Non-​Governmental Organization(s) NSS National Security Strategies (United States) OBOR One Belt One Road ODA Official Development Assistance


xvi  List of abbreviations OECD Organization for Economic Co-​operation and Development PBOC People’s Bank of China PiS Law and Justice Party (Poland) PITA Polish Investment and Trade Agency PLA People’s Liberation Army PO Civic Platform Party PPP Purchasing Power Parity PSL Polish People’s Party RMB Renminbi RZD Russian Railways Company SAF Strategic Action Fields SAFE State Administration of Foreign Exchange SAARC South Asian Association for Regional Cooperation SCO Shanghai Cooperation Organization SEZ Special Economic Zone SGR Standard Gauge Railway SIJORI Singapore, Johor, and Riau SIPRI Stockholm International Peace Research Institute SLOC Sea Lines of Communications SMEs Small and medium-​sized enterprises SREB Silk Road Economic Belt SOEs State-​owned Enterprises TAPI Turkmenistan-​Afghanistan-​Pakistan-​India gas pipeline TEN-​T Trans-​European Network for Transport TEU Twenty-​foot Equivalent Unit UNESCAP United Nations Economic and Social Commission for Asia and the Pacific UIC Union Internationale des Chemins de Fer UN United Nations V4 Visegrad Four WBIF Western Balkans Investment Framework WTO World Trade Organization WWF World Wide Fund for Nature XUAR Xinjiang Uighur Autonomous Region

1  Making analytic sense of the Belt and Road Initiative A plea for multi-​and trans-​disciplinary approaches and eclecticism Alfred Gerstl and Ute Wallenböck The BRI basket: policies and tools The 50 children, aged 8 to 12  years, who attended an educational but also playful class on the ancient Silk Roads at Palacký University’s Children’s University in Olomouc, the Czech Republic, in February 2020 were fascinated. The children were stunned to get insights in Marco Polo’s legendary journey as well as the life and interactions of different ethnic groups, various cultures and religions, and the century-​long exchange processes along the ancient Silk Roads. The term die Seidenstraße (the ‘Silk Road’) was coined by German geographer Ferdinand von Richthofen in the 19th century. The historical Silk Road was not a single road but a network of routes that originated due to silk trade and the transfer of other products, many of them unknown in Europe in the Middle Ages (Wallenböck 2019). Therefore, we use the term ancient Silk Roads (in the plural). “Traveling” in small groups between five destinations representing, inter alia, a Chinese tea shop, a workshop for silk painting, and a traditional market in Central Asia, the children at the Children’s University received at each destination a stamp for their travel permits. The aim was to demonstrate the young students that a few centuries ago the journey was not only hindered by high mountains and dangerous deserts, but also by administrative restrictions made by political leaders. This knowledge about the obstacles and how they needed to be overcome may have added further to the children’s fascination. However, not only children, also many adults believe in a positive, highly romanticized narrative of the ancient Silk Roads. No wonder that the New Silk Road builds on this powerful friendly image of peaceful trans-​continental exchange (Chong 2020; Frankopan 2015, 2018). Indeed, the ancient and the New Silk Road(s) have certain objectives and features in common –​at least at the first view. Both are vast transport corridors, enabling the exchange of goods, ideas, and people between Asia and Europe. However, there exist also significant differences. First, unlike its historic predecessor, the Belt and Road Initiative (BRI) is a deliberate political project. Even though it largely builds on existing transport corridors and regional infrastructure schemes, being a more than USD 1 billion large project, it dwarfs all other regional connectivity initiatives in Asia and Europe.

2  Alfred Gerstl and Ute Wallenböck Secondly, as the BRI is a Chinese brainchild, the People’s Republic of China (PRC) is logically placed at the center-​stage: all roads lead to China. Thirdly, concerning its geographic scope the New Silk Road is much more ambitious than the ancient one. It spans from China to Southeast, Central, and South Asia, further to the Middle East, East Africa, and Europe. Due to the maritime component, Oceania and the Antarctic (the so-​called Arctic or Polar Silk Road) are already formally included, and Latin America and the Caribbean will likely join the initiative, making it a truly global endeavor (see Map 1.1). The ambitious BRI was first proclaimed by Chinese President Xi Jinping in Astana (now Nur-​Sultan) in Kazakhstan in September 2013, where he presented his plans for the land-​based Silk Road, the so-​called Silk Road Economic Belt (SREB). One month later, in a speech in Indonesia’s capital Jakarta he laid out the second component of his initiative: the 21st-​century Maritime Silk Road (MSR). The main objective of the New Silk Road is to modernize the broadly defined infrastructure, including roads, railways, airports, ports, pipelines, and telecommunication networks, in China and the neighboring regions, to better connect these parts of the world with each other. Thus, by virtue of the BRI China shall become better connected by land and sea with its close neighbors, but also geographically more distanced nations in Northeast, Southeast, South, and Central Asia, the Middle East, East Africa, and Europe. Overall, in improving trans-​regional connectivity and interlinking existing transport corridors in Asia, the BRI facilitates a trans-​continental exchange of goods, services, ideas, and people. While this dimension can be per se regarded as positive, there is also a negative side. Better trans-​border connectivity also nolens volens contributes to the spread of transnational criminal networks, notably people, weapons, and drug smuggling, and of diseases and pandemics, such as currently the coronavirus (Covid-​19) which originated in China’s Hubei province. Cross-​border exchange, facilitated by the ancient Silk Roads, was already a decisive factor for the distribution of the plague from Asia to Europe in the Middle Ages (Frankopan 2015: 63). As of June 2020, we witness the extreme paradox that in our globalized and, especially in Europe, borderless times in order to fight the further spread of the coronavirus many nations around the globe shut their borders and severely restricted the movements of their own citizens within their territory. Even in the Schengen Area not all borders were open to all European travelers by the end of June 2020. Despite the international criticism on China’s failure to contain the virus in early 2020, as of June 2020, Beijing could change its negative image to the positive, at least in certain countries. President Xi emphasizes the “Health Silk Road” component as part of the BRI, already mentioned in 2015 (Kuo 2020). In fact, the PRC provided urgently needed medical goods to various nations, demonstrating its solidarity with affected societies. (Immediately after the Covid-​19 outbreak it was China which received those goods from up to 80 nations and various international organizations.) This manifestation

Making analytic sense of the BRI  3 of medical diplomacy, though, has been criticized by the European Union (EU) and the United States (Myers and Rubin 2020). So far, apart from Italy, Serbia especially benefited from China’s support  –​a nation that is already a key beneficiary of Chinese BRI investments in Central Eastern and Southeastern Europe. However, criticism on the quality of the face masks donated by Beijing has been raised in various countries. All in all, according to official Chinese sources, the BRI shall create trust among the participant countries, enabling to subsequently deepen cooperation in trade, finance, economics, and people-​to-​people connectivity. The latter is a crucial dimension of the BRI, both a means and aim of the initiative (State Council of the PRC 2015). Chinese officials like to present the New Silk Road as a win-​win cooperation. They highlight the public goods Beijing provides the international community and, being a developing nation itself, that it strengthens the influence of the Global South in the international system (Sheng 2018; State Council of the PRC 2015). Although the majority view is that the post-​1945 international order favors the Western nations, so far due to a lack of consensus plans for reforms, for instance, of the United Nations or the Bretton Woods Institutions, have not gone far. The BRI may become a catalyst for reforming global (financial) governance. However, rather than imposing a system primarily based on Chinese interests and power, a consensus of the industrialized and developing nations is required to develop a more just and inclusive order (Gerstl 2020: 135). Outside China both the geographic scope and the opaque aims of the BRI raise doubts, if not concerns about Beijing’s strategic motives behind the New Silk Road. Often mentioned realpolitik objectives behind the BRI are: getting better access to natural resources in foreign countries, but also to export China’s excess production, notably steel, cement, and aluminum, as well as more sophisticated products to the Western markets. Another fact is that in many countries Chinese laborers rather than the local workforce are building the roads, railways, and bridges, thus reducing the unemployment rate in China itself. Almost 90 percent of the China-​funded BRI projects are carried out by Chinese contractors (Frankopan 2018: 120). Even though the literature on the BRI will further grow significantly, it is unlikely that a consensus will emerge about the exact motives behind the New Silk Road. Rather, it will remain highly contested in politics and academia whether the BRI is building on a comprehensive strategic masterplan or even a grand strategy to become the dominant political and/​or economic power along the New Silk Road, aiming at changing the existing regional and international order (Gong 2019; Jones and Zeng 2019; Zeng 2019; Beeson 2018; Ploberger 2017; Rolland 2017; Pu 2016; Fallon 2015). This question is one of the red threads of this volume; Struye de Swielande and Orinx as well as Liu address it explicitly in Chapters 7 and 8, respectively. According to our viewpoint, the BRI resembles a big basket in which an ever-​increasing amount of China’s domestic, economic, and not least strategic interests, policies, and implementation tools have been put –​and which

4  Alfred Gerstl and Ute Wallenböck are utilized by various Chinese actors at the state and provincial level to promote their interests. This assessment, though, does not rule out the possibility that the Chinese government might develop a comprehensive BRI strategy in the future. The many different perceptions and interpretations of the New Silk Road demonstrate that the BRI is very much what an observer wants to see –​or, to be more precise, how he or she perceives China, its astonishing economic and military rise in general, and its aims in the international arena. Accordingly, contradictious views on the BRI are widespread. In many countries we notice among ordinary citizens the phenomenon of Sinophobia, while at the same time groups of citizens, usually the elites and business circles, share a positive view on China. In regard to Central Asia, Sébastien Peyrouse (2016: 22) observes: “Sinophilia and Sinophobia go hand-​in-​hand (…). Both can be present in the same person depending on the angle of view or the question being addressed”. Among the contributing factors to Sinophobia in Central Asia are the perceptions of China’s debt-​trap diplomacy, unfulfilled promises, (domestic) corruption, and the harsh treatment of the Muslim Uighur minority in Xinjiang (Kruglov 2019). We may generalize that some neighboring nations use Sinophobe sentiments to distance themselves from China, as a kind of “intersection between hatred and fear” (Billé 2015:  10; emphasis in original). In regard to Mongolia, Franck Billé (2015) investigates the connection of Sinophobia with Mongolia’s desire to distance itself from China and from Asia. He claims these sentiments to be embedded rather in historical than in current economic or political factors. Similar findings in regard to Central Asia are presented by Cathrine Owen (2017). She traces back the Sino-​Russia tension around territorial claims in this region to the interactions between the Qing and Russian Empires in the 19th and 20th centuries. She further claims that, to date, Sinophobia manifests itself in the conspiracy theories of Chinese intentions in Central Asia. At the same time, Peyrouse summarizes as the main result from surveys on China conducted in Central Asia that “China remains a challenge for Central Asia” (Peyrouse 2016: 18; emphasis in original). Negative perceptions of the population on China may impact on the relations with Beijing –​Sinophobia can be regarded “as one of the major stumbling blocks for [the] BRI” (Vakulchuk and Overland 2019: 118). However, the phenomenon of Sinophobia is not restricted to Central Asia, but can also be witnessed in Southeast Asia, for instance, in the Philippines and Myanmar. The perceived rising influx of Chinese workers seems to be a significant catalyst for anti-​Chinese feelings for which Malaysia is another example (Kyaw 2020). Initially, most citizens outside the PRC had a comparatively favorable view on China and the BRI, but in general it has turned recently more skeptical or even negative. The American Pew Research Center conducts annual opinion polls on the perception of China, the latest one in 2019. Striking are the regional differences. In Western Europe, China’s image further suffered in 2019 (median: 57 percent an unfavorable, 37 percent a favorable perception).

Making analytic sense of the BRI  5 In Central Eastern Europe, China has in general a positive image (36 unfavorable:  43  percent favorable), exceptions are Slovakia (40:48) and the Czech Republic (27:57). In East Asia, the negative perceptions are very strong, with Japan (85:14) and Indonesia (36:36) representing the extreme poles. Reasons for the increasingly unfavorable views are China’s rising influence in economics and world politics and its military power (Silver, Devlin, and Huang 2019). One of the most prominent criticisms on the BRI concerns the financing of the projects. Notably, developing nations lack alternatives for funding and thus must rely on China. This raises fears of a deliberate Chinese debt-​trap diplomacy. The most cited examples are the harbors of Hambantota (Sri Lanka) and Piraeus (Greece) as well as the Bar-​Boljare highway project in Montenegro. The Chinese Export-​Import Bank (Exim) granted the small Balkan nation a loan which covers 85  percent of the building costs. The highway is built by a Chinese consortium, employing 3000 Chinese laborers. However, there are doubts about economic feasibility and whether the project can be realized at all. In addition, due to the intransparency of the agreement with Beijing, there are wild speculations about possible leasing options for China if Montenegro cannot repay the loans (Jeska 2020). This example provides an illustration for Jeremy Garlick’s (2020: 2) claim that it is impossible to separate the economic dimension of the BRI from its political and strategic logic. Yet, whether the BRI is regarded as an altruistic Chinese initiative to globally promote wealth or a tool to impose Chinese dominance on other regions, foreign countries and companies can benefit economically from the New Silk Road. For this, however, the specific BRI projects need to be financially, socially, and environmentally sound and sustainable. To prevent negative repercussions, they should undergo before their start a thorough Environmental and Social Impact Assessment (ESIA) (Russel and Berger 2019:  13). Moreover, the national political, economic, and legal systems of the BRI participants must guarantee an efficient and corruption-​free implementation of the projects. In other words, if handled appropriately, the BRI offers the partners a broad set of economic opportunities. Whether the New Silk Road follows a masterplan or not, the BRI already impacts economically and increasingly strategically on many regions and countries, be they participants or by-​standers of the initiative. The main non-​ participantis the United States. Japan has not joined the initiative either but agreed to selectively cooperate with China in joint infrastructure development in Asia (Armstrong 2018). Both Washington and Tokyo, however, promote their own, albeit much smaller connectivity initiatives in Asia. They also pursue a Free and Open Indo-​Pacific Strategy, emphasizing multilateralism and upholding a rules-​based international order (United States Department of State 2019; Ministry of Foreign Affairs of Japan 2018). Even though India collaborates with China in infrastructure development, it is also highly critical of perceived negative Chinese aims behind the BRI. Especially worrisome for New Delhi are Beijing’s string of pearls, i.e., a series of ports in Southeast and

6  Alfred Gerstl and Ute Wallenböck South Asian countries leased by China, and the close cooperation of China with Sri Lanka and Pakistan (Hoering 2019:  114–​117). The Sino-​Pakistani collaboration is especially close, the China-​ Pakistan Economic Corridor (CPEC), including the port of Gwadar project, being the most prominent and controversial example. According to Siegfried O.  Wolf (2020), “CPEC consists of a program to promote economic performance, but also serves as a tool for Beijing to extend its strategic influence from the South China Sea to the Indian Ocean and the Arabian Sea”. To demonstrate India’s dissatisfaction with the BRI, Prime Minister Modi refused to participate in the two Belt and Road Forums in Beijing in 2017 and 2019, respectively. India’s diplomacy, though, was successful in removing the Bangladesh-​ China-​ India-​Myanmar Economic Corridor (BCIM-​EC) from the list of the official six major BRI corridors after the Second Belt and Road Forum in 2019. However, the project itself –​improving the connection between Kunming in China and Kolkata in India –​will be further carried out (Kamdar 2019). This compromise demonstrates the usually very pragmatic approach to economic relations which prevails in Asia. Two regional organizations, the European Union and the Association of Southeast Asian Nations (ASEAN), must respond to the strategic challenges posed by the BRI as well. Their main concern is that the New Silk Road may negatively impact on their ability to set regional norms and rules. China has close friends in both organizations, not least due to its economic clout. In the past, Hungary and Greece prevented a stronger criticism of the EU on the human rights situation in China and Beijing’s refusal to accept the ruling of the Arbitral Tribunal on the South China Sea in 2016. Cambodia supported China’s position in the South China Sea dispute, too, causing the spectacular failure of the ASEAN Foreign Ministers’ Meeting in July 2012. Neither the EU nor ASEAN have formally endorsed the BRI. Consequently, Beijing deals with the European and Southeast Asian nations –​as well as the other participants –​on a bilateral base which further strengthens its negotiation power (Gerstl 2020: 128–​134). Concerning the perceived negative repercussions of China’s policies and the BRI in particular, the EU is much more outspoken than the more cautious ASEAN. In its strategy paper on the European-​Chinese relations, released in March 2019, the EU offers a comprehensive and complex view on China and the BRI. It portrays the PRC as a partner, a competitor, and, for the first time ever, as a “systemic rival promoting alternative models of governance” (European Commission and High Representative 2019: 1). A key reason for this critical view is the 17+1 format, established by China in 2012. (Before Greece’s admission in 2019 it was known as 16+1.) Brussels responded with a stricter screening mechanism for foreign investments that de facto targets Chinese companies and its own connectivity strategy for Europe and Asia (European Commission and High Representative 2018). Despite growing skepticism there exists also ample room for cooperation, especially in the realm of connectivity. Overlaps could be explored between the

Making analytic sense of the BRI  7 BRI and the EU’s Trans-​European Transport Network (TEN-​T) program, an ambitious scheme for upgrading the trans-​European transport corridors for all modes of transport, including railways, maritime shipping, and air transport. The core network shall be completed by 2030 (European Commission 2020). Especially useful would be to jointly plan railway connections from the Eastern European borders to Ukraine, Russia, and Central Asia together with the involved countries. Also, especially in regard to infrastructure and connectivity, there is a tremendous potential for collaboration between China and ASEAN. The Association has promoted since the 1990s its own infrastructure schemes, supported by Japan and the Asian Development Bank (ADB). The PRC and Southeast Asia are closely interlinked economic partners, as the Southeast Asian countries form an integral part of the trans-​Asian production networks. Unlike the more developed European nations (and with the exception of Singapore), they require financial support for improving their infrastructure. The logical partners are China and, due to its more limited financial capacities, to a lesser extent Japan. Tokyo, however, enjoys a high reputation as a reliable ally, as it has since the 1970s actively engaged in infrastructure-​building in the region, notably the Greater Mekong Sub-​Region (GMS). Indeed, ASEAN seeks cooperation partners for implementing its Master Plan on ASEAN Connectivity (MPAC) 2025. Traditionally, ASEAN uses a much more diplomatic wording than the EU, but clearly expresses the need of all initiatives of regional and non-​regional actors to respect ASEAN’s regional centrality and the rules-​based international order (Gerstl 2020: 129; ASEAN 2019: §5). These terms are also used to criticize China for its assertive behavior in the South China Sea. Not least due to the unresolved territorial dispute in this regional hotspot the United States remain a strong partner in the realm of security. The so-​called Malacca Straits dilemma –​the current inability of the Chinese navy to control this chokepoint –​is one reason for Beijing’s plans to create inland transport corridors in Southeast Asia (Myanmar and Malaysia) to circumvent the South China Sea (Mobley 2019: 54–​63). The strongest regional organization in Central Asia is the Shanghai Cooperation Organization (SCO). Deep collaboration, though, is inherently hindered by strategic rivalries among the key members. Despite overall friendly relations, the power imbalance between China and Russia and their diverse strategic interests, notably in Central Asia, Moscow’s so-​called near abroad, makes the emergence of a cordial Beijing-​Moscow axis unlikely. Thus, a close institutional cooperation between the Russia-​led Eurasian Economic Union (EAEU) and the BRI, proclaimed in 2015, is in reality difficult to achieve (Putz 2018). Much more openly visible is the rivalry between Beijing and New Delhi which is also an obstacle for transforming the SCO in a BRI facilitation mechanism. China’s engagement in Pakistan further adds to India’s distrust of Beijing and Islamabad. And the enmity between India and Pakistan additionally complicates regional cooperation in South Asia (Wagner 2019).

8  Alfred Gerstl and Ute Wallenböck Ironically, recently the CPEC and the port of Gwadar project –​as well as a third prominent project, the Budapest-​Belgrade high-​speed railway –​became symbols for the difficulties for implementing the New Silk Road. The delay is not only due to security and economic problems in Pakistan or legal issues in Hungary, i.e., the violation of EU procurement procedures. It is also related to the global economic crisis due to the Covid-​19 pandemic that has also slowed down China’s economic growth, which is further exacerbated by the trade war with the US (Prasso 2020). These developments further amplify the already existing trend of cancelling or downsizing New Silk Road projects. Fears of falling in a debt-​trap led governments renegotiate project terms, i.e., in Pakistan and Malaysia. Moreover, Chinese companies have reduced their foreign direct investments in the last few years. Since the launch of the initiative China has spent USD 337 billion, but the annual investments have shrunk recently. In 2019 and 2018 the annual spending amounted to USD 75 billion; in 2017 it was 14  percent higher (Prasso 2020). In general, Chinese foreign direct investments declined in 2019, reaching USD 110.6 billion (–​8.2 percent) (Reuters 2020). Despite this decrease in spending and Chinese foreign direct investment, the BRI is here to stay –​at least for the near future. However, whether the New Silk Road project can survive the term of President Xi Jinping remains to be seen. Due to different political and economic priorities of a new president, even though the BRI may not be fully cancelled, a downsizing, both in the Chinese official narrative and in reality, seems to be a realistic scenario.

How to make analytic sense of the BRI? A plea for theoretical pluralism The basic idea of this edited volume is not only to provide guidance for the readers in focusing on a clear BRI research agenda, but also to contribute to closing the still existing gap in theoretical and empirical research on the BRI. Many different theories and approaches with specific methods are utilized to make sense of the New Silk Road and its impacts on participant and non-​participant countries, mostly the US and Japan. Some researchers are interested in the domestic economic situation in China and the motives of the Chinese central and provincial governments, others concentrate more on the economic impacts of the BRI on a certain region or country, but do not take the strategic or security effects into due account. In general, different disciplines tend to address different topics from sometimes opposing angles, making a dialogue with other disciplines difficult. Striking, in this context, for instance, are the different interpretations of International Relations (IR) and anthropological theories of concepts such as tianxia (天下). “All under heaven” is an ancient Chinese cultural concept that nowadays refers to the notion of political sovereignty (Godehart 2016). It has a much more fluid and less territory-​ centered meaning than the Western concept of Westphalian sovereignty that emphasizes the principle of exclusive sovereignty over a territory with fixed and internationally accepted borders. Taking tianxia seriously as a Chinese way


Making analytic sense of the BRI  9

Map 1.1 The Belt and Road Initiative.

10  Alfred Gerstl and Ute Wallenböck of viewing International Relations and as a conceptual starting point for analyzing China’s foreign policy shows that Western theories do not have to uncritically accept Chinese and Asian theories, but that they can be enriched by an informed study of these school of thoughts (see Chapters 7 and 8). In this book, we do not aim to present a new theory or approach that explains the BRI in its totality. On the contrary, as the BRI is a complex project with diverse planned and unplanned impacts on various sectors and actors in the participant countries, ideally various disciplines and theories should be employed in the analyses. This book was conceptualized to demonstrate the merits of an eclectic approach, demonstrating the added value of employing theories from IR, Political Science, Economics, Political Geography, and Sociology. Consequently, it makes a strong plea for inter-​ and trans-​disciplinary cooperation, pluralism, and a comparative approach, drawing from case studies in different regions. Employing various approaches and discussing the sometimes similar, but sometimes also contradictory findings helps to avoid blind spots in the research on the BRI. For instance, in many IR analyses of the BRI the “hard infrastructure” is missing, as they usually focus on the “soft infrastructure”, namely the rules, norms, and principles that govern the New Silk Road. “Hard infrastructure” refers to the physical infrastructure, i.e., roads, railways, bridges or maritime transport routes –​a traditional field of studies for economists and political geographers. This book takes, through a focus on logistics, also a geopolitical and geo-​economic view on the “hard infrastructure” of the New Silk Road. In particular, two chapters examine the strategic importance of the railway connections set up by the BRI between China, Central Asia, and Europe, in particular, Poland. Another discipline that is required for a comprehensive assessment of the BRI is Macroeconomics. Sound recent data help to put Chinese investments and loans into perspective, enabling comparisons with the economic (and political) engagement of other nations. Yet, how China uses its economic influence in a certain nation to promote its aims is not only a question of how economically dependent this country is on China. Key criteria are the interests of powerful domestic actors, be it politicians, business leaders, the media, or non-​ governmental organizations (NGOs), and whether they benefit from closer relations with Chinese counterparts. Thus, an analysis of the impacts of the BRI on certain countries requires expert knowledge of their political and economic system and the influence of social actors. Due to the complexity of the research field, without the close cooperation of specialists in various disciplines it will not be possible to reveal the full logic of the BRI and its complex repercussions on the participant and non-​participant countries.

Scope and aims of this book The guiding theme of this book is China’s Belt and Road Initiative. What sets it apart from other publications, is that, utilizing different disciplinary

Making analytic sense of the BRI  11 approaches, it looks at the BRI and its strategic and economic impacts from the perspective of China’s close and more distant neighbor regions and countries. How do political decision-​makers, elites, business leaders, and the population at large view the BRI and respond to it? How are selected regions and countries specifically affected by the New Silk Road –​economically, strategically, and politically? And how do they respond to the opportunities offered by the BRI and the risks it poses? Three regions were selected to ascertain these research topics, namely Central Asia, Southeast Asia, and Central Eastern Europe (CEE). In addition to these three regions, certain contributors add case studies from South Asia and Africa, notably India and Ethiopia, to broaden the empirical base for comparisons. Exactly the same guiding research questions and trans-​ disciplinary approach underpin also the project “Sinophone Borderlands  –​Interaction at the Edges” (1 July 2018 to 30 June 2023), funded by the European Union Regional Development Fund (; reg. CZ.02.1.01/​0.0/​0.0/​16_​ 019/​0000791). Conducted at the Department of Asian Studies at Palacký University in Olomouc, in the Czech Republic, more than 60 Czech and international researchers working full-​or part-​time analyze in addition to the impacts of the BRI the political, economic, security, cultural, social, and linguistic relations of the Central, Northeast, and Southeast Asian as well as Eastern European nations with China in general. In order to shed new light on the BRI, two members of the team of Sinophone Borderlands, Alfred Gerstl and Mária Strašáková, started to plan in autumn 2018 an edited volume covering different theoretical approaches and regions. Eighteen prospective authors with expertise in different disciplines and regions were invited to the two-​day conference “Economic and strategic impacts of the Belt and Road Initiative on Central Eastern Europe, Central and Southeast Asia: Similarities and Differences” in Olomouc on 20/​ 21 March 2019. They were joined by other academics and diplomats who were invited to provide critical feedback. In total, more than 40 experts from 20 countries attended the conference which was held in a workshop format to discuss in specific sessions the presentations. The overall aim was to ascertain China’s strategies of promotion and implementation of the BRI in Central Eastern Europe, Central, and Southeast Asia, notably to highlight the similarities and distinctions of China’s BRI strategy towards these three regions. The conference was organized by Gerstl and Strašáková with strong support from the Sinophone Borderlands team. This book is not a traditional conference proceeding. Rather, the conference deliberately facilitated the process of fine-​tuning the arguments of those contributors who presented in Olomouc. Moreover, based on the topics and ideas that were raised during the conference but not covered in detail, the editors invited other colleagues to contribute to this edited volume, either with an own chapter or as co-​authors. As Mária Strašáková took a leave from academia in 2019, Ute Wallenböck (also a researcher in the Sinophone Borderlands project) joined Alfred Gerstl as co-​editor.

12  Alfred Gerstl and Ute Wallenböck In offering a trans-​ disciplinary and multifaceted perspective on the New Silk Road, this edited volume wants to inspire the readers to critically challenge mainstream interpretations of the aims and impacts of the BRI. It is neither a textbook nor does it target a specific disciplinary audience, for instance, students of International Relations. Instead a broad audience, including academics and students from various disciplines, be it Chinese Studies, Political Science, International Relations, Political Geography, Sociology, Economics, International Development, or Chinese Studies, but also practitioners, journalists, and NGO representatives will find new and insightful analyses. To make this edited volume more intriguing for the reader, it deliberately does not follow the traditional structure of “theories”, followed by “case studies”, the latter usually being further split into various regions. Rather than presenting a false or at least misleading dichotomy of theory and practice, it aims at creating a dialogue between the individual chapters. A new thought, e.g., the claim made in Chapter 4 that the New Silk Road facilitates the rise of authoritarianism in certain countries, is directly followed by an additonal reality check, a case study of China’s influence on Kazakhstan and how Kazakh opinion leaders and the broad public perceive it. Due to its vague design and broad nature, the Silk Road initiative offers ample room for positive and negative interpretations of its potential strategic and economic impacts on other nations. Empirical case studies to ascertain these impacts therefore form an indispensable part of this book. As there are more than 130 countries and international organizations participating in the BRI, we had to select specific case studies. Conversely, this means that we had to exclude certain examples. In Southeast Asia, we deliberately opted for Malaysia and Thailand, but also for examining the region as such. At the first view, the completely different view and policy of Malaysia under Prime Minister Mahathir compared to the predecessor government makes this example stand out in the region. Thailand was selected because of the interesting correlation between Chinese (economic) influence and domestic interests of specific groups of citizens in promoting the BRI. We do regret that due to the word limits of this Routledge series, we were not able to include a chapter on Indonesia. This country is interesting due to a variety of causes, notably because Xi Jinping announced the 21st-​century Maritime Silk Road during a speech in Jakarta in October 2019. Similar to Vietnam, Indonesia also actively promotes its own infrastructure scheme, offering opportunities for cooperation with China, but also Japan and other international donors. While open to Chinese investment, Indonesia does not simply accept Chinese norms but is keen to define the BRI project terms together with China (Parameswaran 2019). In Europe, we focus on Central Eastern Europe, in particular the 17+1 format; Hungary and Poland are especially addressed. The reason for choosing Hungary is the hotly disputed concept of illiberal democracy promoted by Prime Minister Viktor Orbán  –​a concept that has certain overlaps with

Making analytic sense of the BRI  13 the logic of the Chinese regime, i.e., the ruling party shall remain in power. Poland, or to be precise:  the cooperation between the Chinese province of Sichuan and its Polish counterpart Łódzkie, was selected because it provides an insightful example of how initial high expectations concerning transport cooperation have not (yet) materialized. In Central Asia, we put Kazakhstan, the biggest and economically strongest country in the region, in the spotlight. The broader region of Central Asia is addressed in various chapters. The structure of this edited volume is as follows. The second chapter (“The Belt and Road Initiative post-​April 2019: plus ça change!”), written by Vijay Nambiar, gives an essential overview of the BRI, including a brief comparative assessment of its repercussions on South Asia. As a former Indian diplomat, Nambiar writes from the point of view of a practitioner. One of his key arguments is that, despite Xi Jinping’s promises at the Second Belt and Road Forum in April 2019 to make the BRI more transparent, inclusive, and green, nothing has changed in reality. In addition, Nambiar examines the strategic challenge India faces due to the advancement of the New Silk Road in South Asia. He disputes the possibility that India develops its own grand strategy for South Asia; more realistic is a concrete “bottom-​up” strategy focused on infrastructure and connectivity projects in its neighborhood. Nambiar’s focus on South Asia provides interesting comparisons to the three regions selected for this edited volume. To enrich the theoretical literature on the BRI, Yu-​Wen Chen formulates a set of hypotheses to develop an approach of how to measure the actual impacts and limits of the BRI (“Thoughts on appropriate approaches to studying BRI’s actual impacts and limits”). Key for her approach is the refusal to regard the Chinese state as the main variable for explaining the success or failure of BRI projects. Chen builds on the strategic action fields (SAF) theory –​a SAF is basically a shared space in which different collective and individual actors with a shared knowledge of the power relations, prevailing narratives, and rules interact with each other. Subsequently, she links the SAF with an analysis of the domestic level (of the participant countries) and a constructivist approach. Chen tests her hypotheses by using case studies from Central Eastern Europe, Southeast, and Central Asia. One example deals with the Helsinki-​Tallinn tunnel project, promoted by a Finnish entrepreneur rather than state actors. The fourth chapter is a timely and thought-​ provoking contribution that deals with the effects of the BRI on domestic political systems (“The Chinese Belt and Road Initiative and its impact on democratization and de-​democratization processes”). Based on a critical neo-​Marxist approach, Wolfram Schaffar argues that the BRI is an additional factor in the global rise of authoritarianism or illiberal democracy. Similar to Chen, he emphasizes the importance of domestic and societal process for understanding the impacts of the BRI. Schaffar highlights the role of different capital groups, their development strategies, and connections and loyalties to transnational capital in mediating external economic influences. His two case studies are

14  Alfred Gerstl and Ute Wallenböck Hungary and Thailand, two countries with increasingly non-​democratic tendencies. He argues that Chinese investment in these countries did not cause but rather augmented pre-​existing conflicts and fueled existing internal societal power struggles. The influence of the BRI on domestic political systems is further examined in the fifth chapter on the Chinese influence on Kazakhstan (“China’s faltering normative power drive in Kazakhstan”). In their constructivist inspired analysis Gaziza Shakhanova and Jeremy Garlick examine China’s normative power in the biggest Central Asian country and the respective perceptions of Kazakh diplomats, economists, and journalists. While the elites have a positive view on China  –​they have a vested interest in higher Chinese investments –​the population is much more critical. The authors even identify a rising Sinophobia, offering different explanations for a phenomenon which is not restricted to Central Asia. Sinophobia poses a significant threat to the BRI, as its success seems to directly depend on a positive or negative perception of China, they argue. It is therefore not surprising that the Kazakh government and state-​owned media try to suppress any anti-​China sentiments, as Shakhanova and Garlick demonstrate in their contribution. Perceptions are also a crucial starting point for Farizal Mohd Razalli’s analysis of Sino-​Malaysian relations under the BRI frame in Chapter  6 (“Malaysia and China’s Belt and Road Initiative: balancing between economic utility and diplomatic expediency”). In his contribution, he is interested in the views of former Prime Minister Mahathir Mohamad. Mohd Razalli shows that Mahathir went within a relatively short time from being a skeptic (not least because of the financial risks caused by the East Coast Railway Link, ECRL) to becoming a believer in the BRI. Using a game theoretic model, the author further develops an innovative formula to measure the interests, honoring behavior, and commitment level of China and Malaysia to ascertain their relations under the BRI frame. Diplomacy is a crucial factor that Mohd Razalli adds to the equation. Chief for the eventual successful renegotiations of the BRI project terms in Malaysia were mutual respect and face-​saving diplomacy, he argues. One of the guiding questions this edited volume raises is: is the BRI China’s grand strategy to increase and spread its geopolitical and geo-​ economic influence in the regions along the Silk Road? Chapter  7 and 8 explore this topic in detail. Tanguy Struye de Swielande and Kimberly Orinx provide a sound theoretical base for answering this question in regard to Southeast Asia (“Chinese grand strategy and the Belt and Road Initiative: the case of Southeast Asia”). In China’s BRI, its string of pearls strategy, and its approach towards Southeast Asia they see parallels to the aim of the game of Go, i.e., to surround a territory and incorporate it step-​by-​step in its own territory. The notion of uncertainty and the impossibility of controlling all actions are key features of this Asian game. Typical is also that the logic of the action is for the opponent difficult to comprehend at the beginning, as it is revealed only through the string of actions. Struye de Swielande and Orinx argue that

Making analytic sense of the BRI  15 Go is therefore an ideal illustration for the importance of possessing a grand strategy that underpins the series of movements and actions for a player. The notion of a Chinese grand strategy also inspires Joyce C. H. Liu (“The BRI, logistics, and global infrastructure: new world order, the game of Go and the disposition of Shi”). She focuses on the “infrastructure behind [the BRI] infrastructure”, i.e., on the logistical dimension. Liu argues that the vision of tianxia is the driving motor behind the BRI. In this context, she provides an interesting interpretation of the logic of the game of Go, too. Taiwan is, as Liu demonstrates, negatively affected by the New Silk Road: China utilizes BRI investments to make smaller nations in the Pacific and Central America switch their diplomatic relations to Beijing, further marginalizing Taiwan in the international community. As Liu shows, the strategy behind the BRI also challenges the US: Beijing’s moves to control critical chokepoints in the logistics chain around the globe, notably seaports, challenges the strategic interests of the US. Last but not least, this chapter refers to the cultural dimension of the BRI. Thereby the example of Taiwan illustrates that “cultural narratives differ in different Chinese political contexts” (Chun 1996: 116). A region where Chinese and US interests clash is Central Asia. In Chapter 9, Alica Kizeková compares the strategies of these two major rivals (“China and the USA in Central Asia:  competing actors with different goals?”). In regard to the US, she demonstrates that finding a diplomatic solution for Afghanistan is one of the main drivers for Washington’s engagement in the region. Other key interests are the promotion of the market principle, democracy, and human rights. The US strategy is severely hampered by a lack of funding. Conversely, the Chinese economic and cultural engagement in Central Asia is much higher, but anti-​Chinese sentiments become stronger, too. As Kizeková shows, the main reasons are corruption associated with BRI projects and China’s repressive policies toward the Muslim population in Xinjiang. Kizeková concludes that both China and the US need to take the Central Asian nations more seriously as partners in order to promote their aims in the region. The analytical utilization of a grand strategy, tianxia, and in particular logistics offers a lens for reading the following two, more empirically oriented chapters (10 and 11). Both focus on the hard infrastructure of the BRI, namely railways and the logistics behind this mode of transport: Frédéric Lasserre, Linyan Huang, and Éric Mottet examine the railway connections along the New Silk Road with a focus on Central Asia (“Rail development potential in Asia in the frame of the Belt and Road Initiative: what market?”). They argue that the promotion of rail corridors by the Chinese government has two important strategic dimensions: first, to make the Chinese rail network and its standards the backbone of the BRI rail connections and, secondly, to utilize railways and the related infrastructure investments to increase China’s economic integration with the neighbors. In his analysis of the Sino-​Polish relations, with an emphasis on the two involved provinces Sichuan and Łódzkie, Bartosz Kowalski demonstrates

16  Alfred Gerstl and Ute Wallenböck that the start of the train connection between these two sub-​regions raised high political expectations in Poland (“From railway dreams to reality check: achievements and challenges of Sino-​Polish relations at the local level –​the case of Łódź-​Sichuan Partnership”). However, as this chapter illustrates, despite a stronger institutionalization of bilateral ties, overall the relations did not considerably deepen. Further, disappointing the high expectations, Łódź has not developed so far into a Central European logistic hub. This is not least due to failures of the Polish central government. In conclusion, the author argues in favor of more realism about bilateral relations. To put the Sino-​Polish relations in a broader regional context, the next –​ and final –​chapter provides a macroeconomic analysis of China’s relations with Central and Southeastern Europe, notably in form of the 17+1 mechanism (“Economic (policy) implications of the Belt and Road Initiative for Central, East, and Southeast Europe”). In line with the other contributors, Julia Gruebler and Robert Stehrer make a plea for a non-​ideological, calm assessment of China’s real regional influence. Using recent data on Chinese investments and loans in the region in comparison to Western European actors, they put the sometimes overexaggerated Chinese (economic) influence into perspective. Gruebler and Stehrer conclude that the BRI bears a lot of economic potential for Central and Southeastern Europe, but long-​term positive economic effects of the initiative will only materialize if it is implemented in a politically and economically sustainable manner. This argument leads full circle back to Vijay Nambiar’s criticism on the lack of transparent BRI governance mechanisms. The findings of Gruebler and Stehrer also support Kowalski’s argument to lessen the high expectations for positive BRI impacts and replace them with a more realistic point of view. We want to thank our contributors for their insightful contributions (which were finalized before the outbreak of the Covid-19 pandemic) as well as the excellent cooperation. We are also very grateful for the support of the team of “Sinophone Borderlands –​Interaction at the Edges” and the editorial assistance provided by Manuel Eckert, a project intern. While the selected case studies in this edited volume provide an insightful and representative assessment of the positive and negative impacts of the BRI on selected participating regions and countries, more empirical research is required to present a complete picture. Interesting would be to add case studies from Africa, where China started its economic engagement already in the early 2000s, and Latin America, where it became a strong economic player in the last decade, too. A focus on specific sectors, e.g., energy resources, or modes of transport, e.g., railways and maritime shipping, would be an appropriate red thread. Only such a broad comparative approach, as applied in this book, can reveal whether the BRI follows a cohesive strategy or if it is “only” a bundle of various Chinese domestic and externally oriented interests and policies. The answer to this question is politically highly relevant, because other governments need to react differently to a masterplan than a flexible, work-​in-​progress scheme. However,

Making analytic sense of the BRI  17 no matter if China follows a deliberate BRI strategy, the other governments have to be aware that the BRI already impacts economically and strategically on their economies and in some cases their strategic interests. Developing a strategic response, similar to the EU (European Commission and High Representative 2019), is the starting point to mitigate the challenges posed by the New Silk Road –​and to benefit from the (economic) opportunities it offers.

Acknowledgments The work on this chapter was supported by the European Regional Development Fund Project “Sinophone Borderlands  –​Interaction at the Edges” (reg. CZ.02.1.01/​0.0/​0.0/​16_​019/​0000791) in case of Ute Wallenböck and a Marie Skłodowska-​Curie Individual Fellowship (reg. CZ.02.2.69/​0.0/​ 0.0/​18_​070/​0010285) in case of Alfred Gerstl.

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2  The Belt and Road Initiative post-​April  2019 Plus ça change! Vijay K. Nambiar

Introduction The Belt and Road Initiative (BRI) is here to stay. The proposal announced by Chinese President Xi Jinping in 2013 at Nazarbayev University in Kazakhstan envisioned China’s reaching across the world to strengthen communication, improve road connectivity, enhance trade and investment facilitation, and strengthen people-​to-​people exchanges. Described by Xi himself as the “project of the century,” the BRI covers infrastructure and investments worldwide of a potential value estimated to be approximately between USD 1.2 and 8 trillion (Bosu 2018) affecting more than 4.4 billion people, or 60 percent of the world’s population, encompassing almost one-​third of global GDP and more than a quarter of the world’s trade volume. By March 2019, Italy became the 130th country to sign up for BRI projects with China. Over the years, however, major questions have been raised in partner countries over the opaque nature of the BRI and China’s overall aims, calling for transparency and greater attention to national corporate governance rules in these countries. At the second BRI Forum in April 2019, Chinese leaders promised improved scrutiny and monitoring of projects to meet these concerns. Chinese officials also evinced greater openness to issues of debt sustainability and environmental priorities. However, in their actual field operations so far, there has been little evidence of change. Originally seen as a logical continuation of China’s paramount leader Deng Xiaoping’s policies of the 1980s of building ‘Socialism with Chinese characteristics’ (Zhongguo tese shehui zhuyi 中国特色社会主义) and integrating it into the environment of global capitalism and of Jiang Zemin’s “Going Out” strategy (Zou chuqu zhanlüe 走出去战略) during the 1990s that enabled China to secure accession to the World Trade Organization (WTO) in 2001 and integration into the global economy, the BRI, under Xi Jinping, has come to be identified with the grandiose pursuit of the so-​called “Chinese Dream” (Zhongguo meng 中国梦). As China progressively increased its external trade and became the largest trading partner to more than 180 countries, it has sought to project “a superior model”1 of the international system, in place of the “Western” rules-​based order, as well as to create new

22  Vijay K. Nambiar multilateral institutions in place of those that had supported global development and international trade so far. If the recent global polls carried out by the Pew Research Center are to be believed, this move is perhaps premature, as international opinion is still ambivalent on the rise of China. While a majority surveyed in most countries seem to believe that China’s influence on the world stage had grown markedly, only 41 percent saw this as a good development (Devlin 2018). The jury, therefore, is still out. In some quarters, Xi Jinping’s BRI project is also seen as a reaction to the US rejection of Xi’s suggestion for a new system of Chinese interaction and diplomacy with the world, called the “new model of major country relations” (quoted in Takahara 2019). When this suggestion was made in 2015, Xi had hoped a rising China would be provided more space in an order still characterized by US hegemony. But the peremptory repudiation of this overture added a greater urgency to Xi’s efforts to reach out especially to continental Europe and to a large part of the developing world with a more ambitious vision. At the First Belt and Road Forum meeting of May 2017, however, Xi sought to reassure the world that China had no intention “to reinvent the wheel” through the BRI but rather it wished to complement and assist the development strategies of its partner countries by leveraging their comparative strengths (Xinhuanet 2017). For Xi, the BRI was seen as China’s platform of cooperation which would create a space to uphold and grow an open world economy, to achieve economic integration and interconnected development and deliver win-​win benefits for all. He stressed that this could only happen in a peaceful and stable international environment. The aims and drivers of the BRI have, meanwhile, been continuously evolving. On the one hand there is the pragmatic consideration linked to connectivity, to the quest for a new engine of growth, utilisation of surplus capacity, development of new markets as Chinese industry moves up the value chain, more deployment of its foreign reserves, internationalization of Renminbi [RMB], and developing and stabilising the less developed western regions of China. (Vivekananda International Foundation 2019) But as China’s exports as a percentage of GDP appear to be declining and a substantial proportion of the country’s growth stems from the current domestic investment and consumption accompanied by supply-​side structural reform, it is cutting down capacity in some critical sectors. The BRI is thus being seen as a means to potentially help in the smooth transition to a more consumption-​driven growth model while also providing a kind of stimulus package for the dropping growth rate. But there is another critical domestic political factor relevant to this thrust. China’s dramatic successes in recent years in eliminating poverty and building a solid and growing middle class of more than 400 million has contributed crucially to the survival and prestige of its ruling party, the Communist Party

Belt and Road Initiative post-April 2019  23 of China (CCP). However, China’s rulers are keenly aware of the trajectory of neighboring South Korea, where a dictatorship advocating Confucian values was overthrown and replaced by what from the late 1980s became a thriving democracy; indeed if the CCP is to survive and thrive, it must recognize the compulsion of buttressing the country’s impressive economic growth within a social matrix that strongly reinforces the dignity, value, and self-​image of its people, especially its young generation (Ingram 2019). Apart from providing them a better quality of life, the government would need to capture the imagination and loyalty of younger generations by pursuing an expansive and outward-​looking vision and policy that would add to the country’s international image, while raising the CCP’s prestige and credibility. Following the Tiananmen events in 1989 and the internal ideological debates they generated, it was only in 1992, after his visit to Southern China that Deng Xiaoping was able to successfully provide a new perspective for China’s youth that helped divert them from the pro-​democracy political mobilization and make them look inwards, towards enriching their exclusive goals, towards becoming affluent, enhancing their professional prospects and the value of their lives. Today, an entirely new generation is being provided with a new alternative to reunite, one that is focused outwards –​the Chinese Dream of which the BRI is an integral part. The cornerstone of this effort is a massive program of funding infrastructure and connectivity to lift not only the hitherto underdeveloped regions of Western China, but also to stretch to Eurasia, the Pacific, and beyond to Africa in a new expression of the country’s “manifest destiny.” Through this ambitious project, China would have the potential to imprint its own developmental experience on to the world at large. The BRI has thus increasingly become connected with the struggle for legitimacy and longevity of the CCP and the regime. But, even as the thrust and spread of BRI activity across Asia and Africa has been frenetic, this plan has drawn criticism from many states of the developing world for its lack of transparency, unreasonable size and scale, the unsustainably large debt burdens it has caused, its reliance on Chinese labor providing little hope for local employment, and its insufficient attention to safeguards against corruption, waste, or environmental damage. In many sections of the population in recipient countries, China’s approach is perceived as being no less than the colonialism adopted by the Western powers of earlier centuries.2 China’s official and non-​official media have been quick to dismiss these charges. The Global Times in August 2018 stoutly argued as follows: China is not colonising Africa. (…) Africa has a lot of raw materials (mineral wealth) and is very much under-​capitalized. It seems like a natural exchange that China should be developing Africa. However, this is nothing like colonization:  colonization was what the European powers did to Africa from the 1500s to 1962. We do not yet see huge cities of Chinese settlers, nor China setting up extraterritorial laws, or making a

24  Vijay K. Nambiar kind of two-​tiered system where Chinese people have superior status to Africans.3 Nearer home, critics recall all too constantly the example of Sri Lanka’s Hambantota port where, in December 2017, the port was handed over to China on a 99-​year lease due to Sri Lanka’s inability to service debts of USD 1.5 billion. The Ports and Shipping Minister declared this decision was taken to get out of a “debt trap.” Other examples include Djibouti in East Africa, where the government’s control of a container terminal built as part of BRI projects was due to be lost, after the country was unable to clear debt equivalent to 88 percent of its GDP of USD 1.72 billion; in Venezuela, China had struck a series of oil-​for-​loans agreements from 2007 that left it owing China around USD 20 billion, according to estimates by China’s Commerce Ministry; Laos saw the country’s debt reach 68  percent of GDP, raising doubts about it being able to pay off USD 6 billion for a rail line being built by China; in Maldives, the opposition claimed the country faced a looming debt trap, with USD 92 million in annual payments due to China to pay off an airport upgrade and bridge project –​roughly 10 percent of the entire budget (Manning and Gopalaswamy 2018). Other projects in the neighborhood have also come up for serious introspection and suffered rollbacks to varying degrees. Malaysia originally cancelled the East Coast Rail Link (ECRL) that was part of the BRI which would have connected its east and west coasts (Deloitte 2019). Malaysia and China were, however, able in April 2019 to renegotiate the project by bringing down the price by a third from the original estimate of USD 16 billion to USD 11 billion. The project was suspended amidst doubts of cost overruns that would have increased the project size to USD 20 billion. Myanmar, too, was able to downsize a BRI-​related port project from USD 7.5 billion to USD 1.3 billion, on grounds that “it didn’t want to repeat the experience of other countries and build infrastructure without sufficient demand” (Meyer and Zhao 2019). Meanwhile, since mid-​2011, public protests had caused the government to suspend the Chinese-​assisted Myitsone Dam project in Kachin state and re-​examine environment-​related issues of the Letpadaung aluminum project. Both projects were vigorously pushed by the Chinese government despite the strong image problems they faced within Myanmar (Anand 2018). In January 2020, President Xi, during a two-​day state visit to Myanmar, finalized 33 agreements in the fields of information, industry, agriculture, security, and for the resettlement of internally displaced people in Kachin State. The most significant pact related to the Kyaukphyu Special Economic Zone (SEZ) on the Bay of Bengal where a deep-​water port would be built at the terminus of the 1,700-​km-​long China-​Myanmar Economic Corridor whose other end is in China’s Yunnan province. The Myanmar corridor provides China with a shortcut to the Indian Ocean, a major goal of Chinese strategic planners. An outlet to the Indian Ocean allows China’s oil and gas imports from the Persian Gulf to bypass the Strait

Belt and Road Initiative post-April 2019  25 of Malacca. While Xi’s visit marked the 70th anniversary of the establishment of diplomatic relations between China and Myanmar, it could well prove to be a landmark visit in extending China’s diplomatic and economic influence more powerfully across Southeast Asia. The land-​locked economies of Central Asia faced challenges due to their lack of infrastructure, and its leadership was well aware of the reality that to increase the region’s access worldwide they would need funding and financial support from outside. Home to a number of renewable resources, Tajikistan and other parts of Central Asia saw the opportunity to leverage the BRI to upgrade and rebuild hydropower plants, develop mining, etc., and improve their overall productivity to make them more competitive. But, with China emerging as the largest investor in Central Asia, concern also grew among the people of a perception of “vassalage to Beijing” (Standish 2019). Inevitably, too, the implementation of projects like road building brought in their wake allegations of large-​ scale corruption. Even before the BRI was mooted, the Dushanbe-​Chanak highway in Tajikistan, built with Chinese funding, opened in 2010 which was operated by an offshore company with no history of highway projects; this and other projects reportedly funneled around USD 25–​30 million of illegal funds (GCRF COMPASS 2019). In June 2018, Kyrgyzstan’s media reported an USD 850  million BRI project under the Chinese Export-​Import Bank’s (Exim) sponsorship for a new north-​south highway, which was enmeshed in illegal payments involving Kyrgyz ministers and Chinese contractors. A  former Kyrgyz Prime Minister also faced corruption charges linked with redevelopment of Bishkek’s power plant by a Chinese company which deprived thousands of residents of heating facilities during the cold winter months of 2017 (GCRF COMPASS 2019).

The BRI as a platform At the Second Belt and Road Forum in Beijing in April 2019, President Xi Jinping acknowledged the need for the opportunities and outcomes of the BRI to be “shared by the world.” He also recognized the need to give more attention to the oversight of non-​ transparent networks of infrastructure projects, of taking on more high-​quality and sustainable deals and for “zero tolerance” against corruption. Also acknowledging concerns of the BRI being a “debt trap” for participating countries, the Chinese leader committed to creating a “debt-​sustainability framework” as well as compliance with international infrastructure contracting standards, and measures to ensure environmental sustainability (quoted in Cheng 2019; Bloomberg News 2019). He urged foreign and private-​sector partners to contribute more funding to BRI projects. Meanwhile, stressing the more positive aspects of the BRI, Foreign Minister Wang Yi said: “the trade volume between China and countries joining the BRI has surpassed USD 6 trillion, with more than 80 bil. US dollars of Chinese investment in those countries” (Wang 2019), while 82 overseas cooperative parks had been jointly built by China along with the

26  Vijay K. Nambiar countries along the route, creating nearly 300,000 jobs for local people. The major thrust of the Second BRI Forum was thus for all stakeholders to “act in the spirit of multilateralism, pursue cooperation through consultation and keep all participants motivated” (Xi 2019). Xi gave special emphasis to the need for a cleaner and greener growth model together with improvement of the living standards of people across the BRI. These statements clearly indicate Beijing’s keenness to change the prevailing narrative surrounding the BRI and to project it as being more inclusive. The basic point, however, remains that the business model of the BRI has not changed. It is a Chinese “investment that expects a return.” Chinese financial institutions lend money for BRI projects in partner countries, and the construction contracts are awarded to mostly Chinese firms. A Chinese company [thus] receives much of the proceeds of the loan, but the host country has got the debt. If the [return on investment] isn’t sufficient to pay off the debt, China will repossess [the project, and it] becomes a debt-​for-​equity swap. (Meyer and Zhao 2019) But China’s approach as a foreign investor to developmental projects operating within such constraints, whether in Africa, Central Asia, or elsewhere, also incorporates the concept of “patient capital” (Kaplan 2018). Investors in patient capital are “equity-​like” investors, willing to “sink” money in a business and to forego immediate returns in anticipation of more substantial returns down the road. Such patient capital investors are better positioned to take risks and to develop comparative advantage in infrastructure financing over investors subject to more traditional conditions of capital account investment and short-​term interests. The Global Infrastructure Forum held in Bali in October 2018 stressed that, contrary to widespread perception, there is sufficient financing available to fix the world’s infrastructure shortfalls, what is needed is to model the projects as “bankable” (Schou-​ Zibell 2018). Management professor, Zhao Minyuan of Wharton School explains that, on their own, many of the BRI projects were not likely to produce sufficient return on investment, and that explains why private investors are not attracted to them. “China is hoping that by coordinating all these projects  –​by connecting all the railways, connecting the waterways with the railways –​every single project will generate more return in the aggregate” (Meyer and Zhao 2019). It is in that context that China’s state sponsorship of BRI makes sense. “With state sponsorship, you create enough externality to make every single investment, which would otherwise be un-​investible, a good project.” She noted that many of the projects are in some of the “most challenging geographic areas and institutional environments,” and the key is to generate “enough momentum for a coordinated effort” (Meyer and Zhao 2019). To further facilitate BRI projects, China has been institutionalizing substantial

Belt and Road Initiative post-April 2019  27 numbers of development finance funding platforms. These include the Asian Infrastructure Investment Bank (AIIB), the USD 40 billion Silk Road Fund in 2014, and the USD 3 billion South–​South Climate Cooperation Fund in 2015. In August 2017, the Shanghai-​based development bank of the BRICS countries (Brazil, Russia, India, China, and South Africa) opened a branch in Johannesburg. Similarly, China’s longer standing policy banks, including the China Development Bank and the China Exim Bank, have adopted a strong outward focus.4 In August 2016, the China Exim Bank reached an understanding on a USD 1 billion industrialization program with the African Export-​Import Bank to assist development of industrial parks and SEZs in Africa. Side by side, China’s BRI has served as an important platform for internationalizing the Renminbi, boosting its use both as a trade and financing currency. By 2017 itself, more than one-​third of BRI countries had signed bilateral swap agreements with China. Through these agreements, partner countries were able to obtain the RMB needed by their respective domestic parties. Building stronger trading links along the Belt and Road helped them not only to increase RMB cross-​border trade, but also further promoted the currency in offshore markets. Not only were Chinese companies able to use their RMB balance sheets to fund projects along the Belt and Road, but they could increase RMB liquidity in those countries, thereby enabling future RMB business. In May 2018 at a meeting hosted by Zimbabwe, a forum attended by permanent secretaries of ministries of finance and deputy governors of central banks from 14 Southern and Eastern African countries, these officials discussed the use of the Chinese RMB among their reserve currencies (Xinhuanet 2018). Mercy Kuo (2018) argues: While the BRI is about connecting the Asian, European, and African continents, opportunities for Chinese investment extend to other parts of the world, including the Americas, offering additional avenues for RMB use. Together, the BRI and RMB internationalization initiatives are bound to have a significant impact on the world. In the following paragraphs, I shall provide an assessment of the progress of the BRI and the challenges it faces in South Asia and Africa.

The BRI’s progress in South Asia Notwithstanding the strong purposiveness shown by individual South Asian countries in addressing challenges they face in building their national economies, the absence of any meaningful progress in sub-​regional cooperation and the complete deadlock in the South Asian Association for Regional Cooperation (SAARC) process has only confirmed its characterization as a “victim of governmental lethargy, bureaucratic inhibitions and, more critically, national prejudices” (Lama 2019). It is thus not surprising that,

28  Vijay K. Nambiar while India and Pakistan continue to engage in bitter recrimination at the sub-​regional stage, others countries like Nepal, Sri Lanka, and Bangladesh should seek to leverage the opportunities offered by China’s BRI overtures to maximize diplomatic flexibility, increase bargaining power, and reap developmental benefits for themselves. While still acutely aware of India’s own susceptibilities vis-​à-​vis the BRI and of the deeper strategic, security, and political implications that there are likely to be for South Asian states and while committed to the largely positive trajectory of their recent bilateral relations with the Modi government, these countries are still unwilling to look at their choices as zero-​sum. Nor are they oblivious to the lessons from BRI’s failures in recent years, of the issues of unserviceable debt, transparency deficits, or the damaging social and environmental impact of individual projects that have raised alarm bells across the world. But, despite these concerns, the benefits emanating from the BRI appear too good to pass up. Nepal Despite its traditionally strong cultural links with India, perhaps because of it, Nepal’s leaders have always regarded better ties with China as a way to reduce its excessive dependence on India. Chafing under the “big brother” attitude of Indian politicians, and deeply impacted by the five-​month economic blockade of 2015, many Nepalese leaders continued to leverage public sentiment against India and in favor of China. Buoyed by this mood, the new government of Khadga Prasad Oli sold the promise of the BRI bringing better infrastructure and greater connectivity with the outside world and helping expand Nepal’s reach into international markets. Attractive projects were proposed by Chinese businessmen to boost tourism and international trade, and China promised to allow Nepal the use of Chinese dry and sea ports, and particularly to develop railways across the country connecting to Tibet and across China, all of which resonated strongly with the leaders and public of Nepal even as it presaged the opening up of vast new vistas for this small land-​locked country. Nepal’s current railways stretch over just 30 km of track. While China’s plans, which included a railway link from Lhasa through Shigatse and Kerung to Rasuwa in Nepal and from that point to Kathmandu as well as further to the religious tourist destinations of Lumbini in the south as well as to Pokhara in the west, were immensely attractive, the projected costs of these connections appeared prohibitively high. The Trans-​ Himalayan Multidimensional Connectivity Network to be completed by China within two years would cost USD 312  million whereas the Kerung-​Kathmandu line would cost around USD 2.75 billion, the Kathmandu-​ Pokhara railway line a further USD 2.8 billion, and the ambitious East-​West railway which would cover around 950 km of track, was expected to cost a whopping USD 7 billion. For a country with a GDP of around 31 billion, these were big figures and Nepal’s leaders were not unmindful of the experience of countries like Sri Lanka and

Belt and Road Initiative post-April 2019  29 Laos (Adhikari 2018). Notwithstanding these worries, however, the benefits of the BRI in terms of improved infrastructure and connectivity appeared self-​ evident. The Nepal-​China Trans-​Himalayan Multidimensional Connectivity Network was officially included in the Joint Communique of the second Belt and Road Forum in Beijing and during Xi Jinping’s recent visit to Nepal a deal was signed for a 70 km rail link cum 28 km tunnel connecting Gyiron in Tibet with the Nepalese capital Kathmandu (Budhatoki 2019). This will be one of the most ambitious infrastructure projects in the country. Sri Lanka While clearly Sri Lanka’s leaders are aware of the implications of the country’s indebtedness to China due to the BRI projects, its debt repayment obligations go beyond any one particular nation or project. Whatever the international repercussions of Hambantota, the real fact, is that, by end 2018, Sri Lanka’s foreign debt was estimated at USD 55 billion, or around three-​ fourths of its GDP. But officials declare that only 9 percent of this debt was owed to China. BRI investments in Sri Lanka are quite significant. Chinese investments in the port sector are expected to transform Sri Lanka’s shipping and industrial sectors. The 114.5 km long Matara-​Kataragama Railway link will be the first new rail line in the country since its independence in 1948, improving coastal connectivity for southern Sri Lanka and expected to stimulate growth in the industrial and tourism sectors. Colombo Port City, the largest infrastructure project in country’s history, will create a new investment destination in the region. Today Sri Lanka’s leaders view the BRI in terms of the country’s overall economic and military strategic engagement, which is not considered a zero-​sum game (Moonesinghe 2019). The country has benefitted from its growing economic ties with China through the BRI and, as such, the government is keen to continue this engagement. But, at the same time, it has adopted a strategy of balancing the economic relationship with China through the BRI through a broadening of its military engagement with other actors across the Indian Ocean region. Sri Lanka will maximize its economic gains but avoid having to submit to China’s more strident political or military ambitions (Moonesinghe 2019). Bangladesh The same as for Sri Lanka is, mutatis mutandis, true for Bangladesh. During Prime Minister Sheikh Hasina’s July 2019 visit to China, Bangladesh signed five agreements, three Memorandums of Understanding (MoUs), and one Letter of Exchange  –​covering a range of sectors including power, investment, culture, tourism, and technology. Since 2016, under the BRI rubric Bangladesh has accessed significant funding from China for its infrastructure projects. When Xi Jinping visited Dhaka that year, the two countries signed 27 investment and loan agreements totalling USD 24 billion. If the

30  Vijay K. Nambiar USD 13.6 billion invested by China in joint ventures in earlier years is added, this totals to over USD 38 billion, making China Bangladesh’s single largest investor (Ramachandran 2019). Other major BRI projects being considered include the development of Information and Communication Technology (ICT) intra-​network for the government; modernizing the telecommunication network for digital connectivity, a reliable and affordable telecom facility and measures to enhance tele-​density, National Data Centre in Ghazipur; development of the Payra deep seaport; a rail link project over the Padma that will enable a direct rail link between Dhaka and Southern Bangladesh; and a 220 km oil pipeline that will enable easier unloading of imported crude oil to facilities inside the country (Shamrat and Ali 2018). Most of these projects are financed by commercial borrowing from China against market rate interest terms but these investments have been agreed to as they are recognized as being crucial for the Bangladeshi economy. The government is worried about the country’s ability to repay, especially in the context of possible rise in global oil prices, the slowing down of Bangladesh’s own inward remittances and possible fluctuations in its readymade garments’ exports. Additional concerns include those of inadequate sensitivity shown by Chinese workers to local culture and tradition, which came to a head in the Payra power plant incident. These contretemps have not, however, diluted the interest for further such projects from China (Ingram 2019). While there is awareness of India’s own reluctance to be part of BRI and its fears of “encirclement” by China, among a large number of Bangladeshi businessmen and officials, even those otherwise sympathetic to India, the growing international clout of China provides major incentive for more intense engagement. For the government, too, there is an added incentive of seeking to bring China more directly into efforts to resolve the Rohingya imbroglio. On the broader issues of the Bangladesh-​China-​India-​Myanmar-​Economic Corridor (BCIM-​EC)  –​ until the Second Belt and Road Forum in April 2020 it was formally listed as a BRI project –​and the connectivity implications of the Asian Highway projects 1 and 2, despite the active engagement of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) in the development of the Asian Highway, there is some frustration at its current unsatisfactory status. In the circumstances, the BRI plans to connect Asia with Europe have assumed greater credibility (Shams 2019). Pakistan The China Pakistan Economic Corridor (CPEC) is perhaps the most prominent and best-​known flagship of the BRI in this part of the world. It comprises a large cluster of infrastructure projects covering modern transportation networks, energy projects, and SEZs under construction with Chinese help, covering the length and breadth of Pakistan. Originally valued at USD 46 billion, its current value is more than USD 62 billion. While China had originally begun the highway project across the Khunjerab Pass as early as

Belt and Road Initiative post-April 2019  31 in 1959 and evinced interest in building a deep-​sea port at Gwadar before the turn of the century, CPEC cover for the upgradation and modernization of these projects took shape only around 2014. Its first phase became operational in November 2016, when Chinese cargo was first transported overland to Gwadar for onward maritime shipment to Africa and West Asia. Other major projects, especially in the power and energy sectors, were commissioned in 2017. It was clear, despite official statements claiming the CPEC was a purely economic endeavor, that the corridor had strong security-​related and strategic dimensions and that the various related schemes around the country were premised more on political motivation than economic calculation. This is also evident in the fact that Pakistan’s military has played a dominant role within the CPEC either directly through their participation in the apex committees and other CPEC-​related entities or indirectly through the involvement of major military-​business entities in project execution. There were also reports of the CPEC being used as a form of “rent creation” by Pakistan’s elites and to foment struggles between different elite groups, between military and industrial groups as well as among these and feudal families (Wolf 2019: 310). Meanwhile, though the debt repayment terms of Chinese loans for projects under the CPEC framework, not being transparent, were difficult for outsiders to access, it was nevertheless clear that Pakistan had put itself in a position where very large amounts of money would be needed for debt servicing in the coming years (Wolf 2019: 311). The core problem, as Kaiser Bengali pointed out, was that the country was spending heavily without comprehensive cost-​benefit calculations and Islamabad could well end up repaying Beijing a CPEC-​related investment portfolio initially worth USD 50 billion (through a loan-​and-​interest scheme) something amounting to USD 90 billion over a span of 30 years (Wolf 2019: 311). In April 2019, the German TV group DW reported that the implementation of CPEC projects had slowed since August 2018 and that Pakistan’s Minister for Commerce, Industry, and Investment Dawood had called for a suspension of all CPEC projects pending a review. Dawood told the Financial Times that the CPEC could be stretched over another five years. He blamed the previous government for giving Chinese companies undue advantages in Pakistan over local companies. Dawood also criticized the previous government headed by Nawaz Sharif, now indicted by the court on corruption charges, for granting China “too favorable” terms on many projects. “Chinese companies received tax breaks, many breaks and have an undue advantage in Pakistan; this is one of the things we’re looking at because it’s not fair that Pakistani companies should be disadvantaged,” he said. Though this report was later denied and Prime Minister Imran Khan attended the second BRI forum in Beijing in late April 2019, it will be recalled that it was Imran Khan’s protest and blockade of Islamabad in 2014 that caused the cancellation of Xi Jinping’s official visit to Pakistan (Shams 2019).

32  Vijay K. Nambiar The new Prime Minister Imran Khan is portrayed as in the pocket of the Pakistani army, at least according to a comment made by his ex-​wife, Begum Reham Khan (India Today 2019). His predecessor Nawaz Sharif felt that improving the country’s economy was the only way to curtail the military’s strength and it was primarily his initiative to privilege economic ties with China that paved the way for the finalization of the CPEC. Even before his ouster, the military was able to hijack this process and take over direction of the CPEC process from the civilian leadership in the country. Some observers in Pakistan believed that the Sharif government had seriously believed that better ties with India would be good for the economy of Pakistan and that the Chinese may have encouraged this line of thinking for its own interests. To a question from DW about Chinese interest in bringing the two countries closer, Karachi columnist Nadeem Akhtar responded that, given the improved ties between India and China in recent months and the bilateral trade reaching USD 90 billion, China would wish to boost economic relations in its neighborhood, primarily for its own interests. China will ultimately want to extend CPEC to India to tap its huge market. But, he stressed, the Pakistani military would not want to give up its power and would continue to oppose better economic ties with New Delhi (Shams 2019). In this approach, it would not be lacking in supporters within the Chinese establishment either. However, in this context, it is of interest that Siegfried O. Wolf, the author of one of the more definitive works on CPEC also believes that, [a]‌s long as Pakistani elites do not improve relations with their neighbors, foremost by stopping their support for cross-​ border terrorists and solving border and territorial disputes, the CPEC will be unable to create maximum benefits or produce a significant contribution for regional cooperation. (Wolf 2019: 313) India needs to respond Many of India’s smaller neighbors have, on occasion, called upon India to come up with an alternate grand vision in place of the Chinese community of shared destiny, one that would provide appropriate space for their developmental aspirations too. While such an expectation would seem unrealistic, even in terms of India’s national self-​image, a more realistic expectation would be for India to clarify some concrete “bottom-​up” strategy that, while basically implementing infrastructure, connectivity, and social currency projects that would meet the aspirations of the local populations especially in the contiguous states of the Union, also catered to the expectations of the wider neighborhood. For Delhi to improve its image as a reliable development partner, it must also be aware that a large part of the frustrations of its neighbors stem from promises made to them that are not delivered in time or in the form originally made. While Pakistan’s case may be considered sui

Belt and Road Initiative post-April 2019  33 generis, India must not consider it inimical if its other neighbors seek reasonable economic ties with China even in the context of the BRI, so long as they remain sensitive to its deeper concerns and are not seen to be working actively against them. India should deliver on its projects in Nepal, not worry about Nepal joining the BRI (Chalise 2019). Over the decades, India has developed a number of cross-​border ties, some on non-​reciprocal bases which have been based on people-​to-​people relationships developed over the centuries. But, if these conditions and relationships were to now be leveraged against India or to serve the commercial or other interests of China, they would most definitely elicit strong retaliatory action from Delhi. Meanwhile, with Bangladesh, where relations have, after persistent and careful nurturing in recent years, reached an unprecedented level of friendship and stability under the Sheikh Hasina government, it would be ill-​advised on either side to forsake them for any temporary or lop-​sided advantage with a third country.

Chinese engagements in Africa China’s relationship with Africa today is a far cry from the strongly ideological “Africa is ripe for revolution” stance taken by the PRC during the early 1960s and 1970s. (These were the words Chinese Premier Zhou Enlai used during his 1964 African tour.) Except for the Tan-​Zam Railways completed in 1976, there was little aid to Africa that was truly developmental undertaken until the early 2000s. By that time, China’s own frenetic internal developmental needs produced an insatiable appetite for raw material and foreign resources which impelled local companies to move aggressively abroad especially into Africa. For the next decade China was all over the continent and, as one commentator said in 2017: if you take the red-​eye flight from Shanghai to Addis Ababa, the Ethiopian capital, chances are you’ll be seated among Chinese workers heading to a construction site in oil-​rich Equatorial Guinea, a cotton-​processing plant in Mozambique, a telecom project in Nigeria. China’s trade with African nations has increased fortyfold in the past 20 years. (Larmer 2017) China’s willingness to provide assistance without subjecting its partners to conditionalities of human rights, clean governance, or fiscal restraint was hugely welcomed. Some countries, like Namibia, considered China’s “all-​ weather friends” (like Pakistan) provided it key resources in return for strong political support. The Chinese companies, speaking of “win-​win,” pursued projects for construction of roads, railways, ports and pipelines, mines and telecom networks, which were recognized as something that might never have been built without them. But, with these companies taking 90 percent control of the assets (as the China General Nuclear Power Company [CGNPC] did of the Husab uranium mines) relations between host government and investor

34  Vijay K. Nambiar became skewed. Also, the inward migration of large numbers of experts and contract workers created stresses in society, as did the scandals involving Chinese nationals accused of tax evasion, money-​laundering, and poaching endangered wildlife which alienated the local population. “You can argue that China is the best thing to happen to Africa –​or the worst,” says Eric Olander, the co-​host of the weekly “China in Africa Podcast.” “The beauty is in the complexity” (quoted in Larmer 2017). Nowhere in Africa is the BRI argument for improvement of infrastructure to help spur all-​round economic development made more compellingly than in East Africa, especially in the case of the Standard Gauge Railway (SGR) in Kenya. This 480 km passenger and freight rail connection between Nairobi and Mombasa completed in 2017 at a cost of USD 3.2 billion was considered the country’s largest such project since independence and has transformed the logistical landscape in East Africa. Apart from drastically upgrading Kenya’s own transport infrastructure and connectivity to the outside world and reducing transit time for its passengers and freight, it has also potentially opened up the route to nearby land-​locked economies such as Uganda, South Sudan, Rwanda, and Burundi. The USD 1.5 billion second stage of the line to Naivasha was inaugurated in October 2019 but the high costs of financing this mammoth project seems to have left Chinese investors reluctant to fund the planned USD 3.7 billion extension of the line to the Uganda border. Despite public criticism of the project and the fact that the country’s debt has mounted to a staggering 55 percent of its GDP, the national leadership of Kenya has not been daunted from continuing to press forward with this BRI related project. Meanwhile, Tanzania has also been pressing ahead with Chinese assistance on a USD 7.6 billion railway line to its land-​locked neighbors Uganda, Rwanda, Burundi, and Eastern Congo. Much of this kind of infrastructure investing by China in Africa is loan-​ funded, and while concerns were expressed from time to time about the unsustainable sovereign debt levels, a recent analysis by the US Center for Strategic and International Studies (CSIS) has noted that, overall, of the 39 African countries listed on the Belt and Road official website (The State Council of the PRC 2020), only three countries:  Congo-​Brazzaville, Djibouti, and Zambia show China’s government financing as the principal creditor. Around 67 percent of African governments’ external debt is owed to either the private sector (which may include Chinese companies) or multilateral institutions. The analysis also reports the findings of the China Africa Research Initiative (CARI) at Johns Hopkins University that seem to reveal that Chinese loans are not a major contributor to debt distress. While, therefore, China’s strategic aspirations may be causally related to its economic engagement in Africa and the two may be mutually reinforcing, it would be dangerous to claim that all of China’s engagement along the BRI in Africa was detrimental. (Risberg 2019)

Belt and Road Initiative post-April 2019  35 As the director of the Africa Program at the Center stated recently, at a congressional hearing, “it is essential to draw a clear distinction between Chinese activities that threaten US interest and those that are neutral or complementary.” The analysis seeks to establish that, notwithstanding issues with project quality, adherence to environmental standards, and transparent procurement processes, China’s contribution to the development of many African countries has been so significant as to become central to their development strategies. Major Chinese projects in Africa that meet basic infrastructural needs of the continent in sectors like roads, railways, ports, and energy include flagship projects like the 2,600 megawatts hydropower scheme in Nigeria, investment of USD 3 billion in telecom equipment to Ethiopia, Sudan, and Ghana, as well as major railroad projects in Benin, Niger, Gabon, and Mauritania. An additional factor adduced is that BRI-​led projects carry social currency, as seen in Kenya and Ethiopia. With Chinese companies having set up more than 56 economic cooperation zones in more than 20 countries across the continent generating more than USD 1 billion in tax revenues and hundreds of thousands of new jobs, these hubs help trigger broader market growth, export earnings, and employment (Erdinger and Labuschagne 2019).

Looking to the future Deloitte China, in a recent report, makes the confident assertion that participation in BRI projects in the future “will be more international and inclusive, with greater private-​sector involvement.” It also finds that this will open up project opportunities for other advanced economies as it extends and deepens beyond Asia and Africa and beyond the energy, resources, and infrastructure sectors. Secondly, China’s focus on quality projects will result in more transparency and risk reduction. It will also benefit consultancies, presumably like Deloitte, to help clients in target countries by conducting better due diligence in making investments. Thirdly, as the Digital Silk Road progresses, it forecasts newer categories and different geographies as likely to emerge, especially in technology. Already projects like a self-​driving tractor run on Chinese technology is being trialed in Tunisia and companies like Osell and Alibaba are using varied B2B platforms to link outside companies with Chinese suppliers. Meanwhile, the City of London has grown to become the leading trading hub for RMB, outstripping other financial centers (Green Finance Initiative 2019). The City of London Corporation (CLC) has tied up with the People’s Bank of China (PBOC) to help build a better network of financial institutions and services for the BRI. Similarly, the promoters are seeking ways to encourage a better understanding of the longer horizon for sustainability of projects; of finding reasonable returns on invested funds and better participation by official institutions, etc. A report brought out by the PBOC and CLC seeks to use development financing as a driver to attract commercial financing and encourage local state currencies to play an active role in mobilizing savings and to develop capital markets denominated in

36  Vijay K. Nambiar local currencies (PBOC and City of London Corporation 2018). It also calls for setting up of Equity Funds; issuance of Silk Bonds to diversify financing channels of BRI financial products; PPPs as a means for participation in BRI projects; and promotion of derivatives for diversification and hedging (PCOB and CLC 2018). The major point that emerges from these moves is the stronger integration they suggest of Chinese financial modalities with other world markets. Meanwhile, the attitude of Western states towards the BRI has varied widely. The United Kingdom, on the one hand, is eager to take advantage of its expertise in banking and development finance to help China find ways to mitigate the financial risks of the BRI, build capacity, and also get Western banks to support debt sustainability of BRI projects. It even went so far as to support China’s full membership of the Paris Club. But, at the same time, it is also working with the US, Japan, Australia, and others to “create healthy competition for the BRI.” A similar ambivalence can also be seen as being played out by Japan and Australia; Japanese Prime Minister Shinzo Abe initiated the idea of a Free and Open Indo-​Pacific (FOIP) as early as in 2016, as a way to connect Asia and Africa, as well as the Indian and Pacific Oceans, by establishing trans-​border connectivity corridors with the object of strengthening a “rules-​based and open maritime order to prevent instability and conflict” (Mehta 2019) and avoid the dominance of any one country (read China) in the maritime realm of the Indo-​Pacific region. Yet, despite its many anxieties, when push came to shove, the Japanese Prime Minister did attend the second BRI Forum in April 2019. Similarly, in Australia, when, in May 2017, the Cabinet Security Committee discussed linking the BRI with Australia’s Northern Development Strategy, the official response was negative, stressing there was no evidence of any tangible benefits accruing to Australia nor any extra investment coming from China beyond what would happen anyway. Added to this were suspicions arising because of the absence of transparency in Chinese BRI proposals. Citing its preference for multilateral initiatives rather than bilateral ones like the BRI, Australia was prepared to join the AIIB while keeping some distance from the BRI (Laurenceson and Collinson 2019). Yet, when the Second Forum was convened in April 2019, Australian Foreign Affairs and Trade Secretary, Frances Adamson, attended it and confirmed Australia’s “preparedness to engage” in the BRI (Adamson 2019). Behind this ambivalence towards the BRI is a more deep-​seated fear and anxiety about the political and strategic implications that the rise of China portends. This anxiety can be observed in matters of the Indo-​Pacific region as a whole as well as for the continuous change of power and influence between nations at the local and sub-​regional level. This applies as much in the case of the smaller countries of the Asia-​Pacific, Southeast, and South Asia, who are at the receiving end of political influence and pressure from all sides, as in the case of the bigger nations like Australia, Indonesia, Japan, and India who continue to nurse their own fears, interests, and ambitions. Unlike

Belt and Road Initiative post-April 2019  37 past eras, no country, perhaps not even the US, can afford a strategy of outright confrontation with China of the kind adopted against the USSR during the Cold War period. The interconnectedness and mutual dependencies that the advent of technology and globalization in the new century has forced on every country have precluded such a response. And yet, possibly for the first time in almost three decades, there is a palpable sense of public insecurity in the US and other Western states over the new sense of ‘manifest destiny’ being displayed by China, seeing it not so much as a military threat as a broader geo-​economic and socio-​cultural challenge. How will China face the future? It is clear that the BRI has become the most important element of the Chinese Dream in assuming center-​ stage in a community of shared destiny of a globalized world in the new century, the test of its civilizational strength and resilience. But how this dream will materialize will depend on the direction that the BRI assumes in the next few decades. In July 2019, the Centre for Global Developments looked at two possible courses of actions the BRI project could take. On the one hand, there were indications that some Chinese banks could agree to form coalitions with other international agencies and multilateral development banks around the world. Consequently, they could use common due diligence and project evaluation standards and, through these means, work jointly with outside agencies on co-​financing bankable, high-​impact projects with greater transparency and risk-​ sharing possibilities (Parks 2019). By pursuing this course more broadly, China could effectively ensure fewer non-​performing loans, have higher impact projects, and suffer lower reputational risk in host countries. The road could be paved for a China that would burnish its image as a genuine team player around the world. On the other hand, Beijing could stick to the more traditional path it has followed thus far, of being more self-​regarding and subject to strong party and central government controls. By following this way, China has been relying on its own nationals for implementation of projects and subjecting its projects to costing and subsidization regimes that continue to remain opaque and impervious to outside scrutiny. While strategically bypassing standard international development financing rules, norms, and practices, it might seek to resist efforts to keep its projects in consonance with environmental, social, and fiduciary safeguards applicable elsewhere or to modernize its monitoring and evaluation practice, under the facile rationalization of following its own unique model of “Socialism with Chinese characteristics.” By adopting such a path of “going it alone” that would depend on closed door agreements with narrow elites in partner countries, the Centre says, it would result in China possessing poorly designed projects and unsustainable financial liabilities that would in turn exert top-​down as well as bottom up pressures within the country, drastically reduce its foreign exchange reserves, prompt corruption and waste, and ultimately result in a decreased appetite for overseas entanglements and a domestic population that will turn inwards (Parks 2019).

38  Vijay K. Nambiar Though Chinese leaders have given indications that they would be prepared to ensure more careful scrutiny and monitoring of its projects to meet the concerns of partner countries, it remains to be seen if real changes will be made, especially where these are likely to involve additional costs and accountability on issues like providing more local benefits, hiring fewer Chinese and more local workers, and conceding more control over projects to local partners. Also increasing demands for transparency will preclude favors to certain firms and friends over others and greater attention to national corporate governance rules in partner countries. While Chinese officials are speaking publicly of being more open to issues of debt sustainability and environmental priorities, this can only happen if there are more basic changes in the business models and practices of Chinese corporate entities, especially those enjoying state patronage. In the final analysis, though, the test of China’s willingness to integrate within the broader international community will depend on how far it will be willing to orient itself to these norms, rather than remain insistent on adjusting them by giving them exceptional “Chinese characteristics.” Despite the revolutionary rhetoric used by Mao during the mid-​20th century against heping yanbian or peaceful evolution in China, which became one of the principal reasons for launching the Cultural Revolution and for the power struggle against leaders like Liu Shaoqi and Deng Xiaoping, China has witnessed precisely such a peaceful evolution since Deng’s policy of “reform and opening up,” regardless of such a rhetoric. Yet, ideologically, the party has been compelled to place a figleaf over this change in approach by not only asserting the undisputable supremacy of the CCP, but also clothing most of its policies in a strongly nationalist fabric of “Socialism with Chinese characteristics” and effectively bypassing any attempt to subject itself to a uniform standard of international conduct. As long as this compulsion remains, the CCP-​ dominated system will remain brittle, policies will continue to be opaque, and the system will be characterized by exceptionalism and unpredictability. This in turn will affect its credibility and trust around the world. However, in a fast-​changing world, and a China that is changing even faster, even this has the potential to change!

Acknowledgments This contribution is based on a study that was initially published by the Indian Institute of Chinese Studies in Delhi as Occasional Paper no. 38 in February 2020. It can be downloaded from the institute’s webpage (

Notes 1 Wang Yiwei (2015) argues that the Silk Road was a road of friendship and prosperity, a road of exchange and mutual respect that offers a superior model of globalisation. This sentiment was echoed by Bangladeshi scholar Rehman Sobhan who said:

Belt and Road Initiative post-April 2019  39 The BRI is, indeed, a global initiative to construct a new international order based on enhancing development and ending poverty across the South within the framework of a more equitable world order. The scope of the BRI thus extends to agendas for comprehensive, deeper economic cooperation across the world. (Sobhan 2019)

2 Howard French (2014) argues: For all of China’s denials that its overseas ambitions could be compared to those of Europeans or Americans, for all of its insistence that its actions are driven by fraternal solidarity with Africans, its fellow victims of colonization, its fellow travelers on the path to development, what I was witnessing in Africa is the higgledy-​piggledy cobbling together of a new Chinese realm of interest. Here were the beginnings of a new empire, a haphazard empire perhaps, but an empire nonetheless.

3 Contrast this to what Namibia’s Minister of Finance, Calle Schlettwein told New York Times correspondent Brook Larmer (2017): “The Chinese say, ‘We want you to be masters of your own destiny, so tell us what you want.’ ” But they have their conditions, too. “They want de facto total control over everything, so it’s difficult to bring about a situation that is truly beneficial.” 4 China’s non-​concessional finance greatly outstrips concessional flows. Moreover, in less than a decade, the country’s top two policy banks  –​China Development Bank and the Export-​Import Bank of China –​have become global leaders in non-​ concessional lending, surpassing even the World Bank. Experts have observed a close correlation between Official Development Assistance (ODA) allocations and recipient support of Chinese foreign policy, suggesting that broad diplomatic interests guide these flows (Snell 2015).

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3  Thoughts on appropriate approaches to studying BRI’s actual impacts and limits Yu-​Wen  Chen

Introduction The Chinese government defines the Belt and Road Initiative (BRI) in functional terms, supporting any international project that has the potential to become part of the BRI. There is no concrete definition of what kind of cooperative engagement there should be. This opens the door to many possibilities, encouraging interested stakeholders in many parts of the world to justify how their projects can be part of the BRI and thus obtain Chinese investments or loans. This chapter, however, problematizes the concept that the Chinese state is the most important, if not the only, variable in explaining the success of BRI projects. It also problematizes the concept that the open and inclusive nature of the BRI can help expand China’s influences. The fact that China opens its arms to any interested parties in joining the BRI does not tell us anything about China’s exact impact in targeted states. The domestic structure approach that has been developed by some political scientists and social scientists (e.g., Risse 2001; Risse-​Kappen 1994, 1999) to analyze transnational advocacy networks or interest group politics can be useful for analyzing the BRI’s influence. One should examine the consternation of domestic institutions, policy and/​or business networks, and the efforts of political and business entrepreneurs. For instance, in some countries, the state actors are the main agents for carrying out the BRI projects, while in others, one can find actors situated outside the formal lines of the state and foreign policy-​making process becoming the main agents for the BRI. In addition to the domestic structure approach, a constructivist approach provides some insights into this matter. Framing and justifying the BRI as relevant to a recipient state’s infrastructure or developmental projects demand substantial effort. This framing should allow potential Chinese investors to feel comfortable with these projects and be willing to contribute to them. Meanwhile, the concept of the BRI has to match norms and identities in the recipient state. In this vein, the BRI will have a localized geospatial meaning. These framing processes are as important as the actual negotiations between the Chinese investors and local stakeholders.

44  Yu-Wen Chen This chapter is structured as follows. It will first point out the problems of popular China-​centric approaches to studying the BRI’s actual impacts. It will then introduce insights from collective action theories that can be used to study the BRI’s actual impacts. The impacts in this study are broadly defined to be the “start” and “final realization” of the BRI projects in the recipient states. I will also propose several hypotheses derived from these theories. Afterwards, I will draw upon a secondary literature review of empirical studies to show the importance of these factors in the realization of BRI projects in recipient states, namely: government support, policy priority linkage, legacy and continuity linking past projects and BRI projects, as well as the work of local champion(s). When elaborating on each of these factors, there will be empirical examples drawn from Central Asia, Southeast Asia, Central and Eastern Europe (CEE), and even countries that are not on the traditional routes where China’s Belt and Road will pass, such as Finland. This diverse empirical evidence will substantiate the theoretical and conceptual discussion.

A critical discussion of China-​centric approaches Among the burgeoning literature on China’s BRI, many articles have a strong emphasis on the motivation and actions of the Chinese state as well as sub-​national Chinese actors (e.g., provincial governments, municipalities) in extending China’s global reach. For instance, Callahan (2016) argues that China is using the BRI and its affiliated institutions and projects to construct what Chinese President Xi Jinping calls a “community of shared destiny” (Callahan 2016:  227), whereby partnering countries are drawn into a Sino-​ centric sphere of relations. Hodzi and Chen (2018) add that this strategy is a safe and pragmatic strategy for China because as a “partial” global power, it can use these China-​led institutions to delimit its sphere of influence as well as to set the agenda and the rules of the global order without overthrowing it, which otherwise would make it confront the declining yet unyielding global power, the US. While this literature leads us to understand the Chinese perspective, motives, and strategy, it has its limits in telling us whether the Chinese dream of creating a Sino-​centric sphere of relations and influence will be accepted and realized in the world. In practice, the sheer rising number of countries that have expressed interest in the BRI, either in the form of signing BRI Memorandums of Understanding (MoU) or joining the Asian Infrastructure Investment Bank (AIIB), also cannot tell us the exact success and impact of the BRI. The reason is that most of the agreements are not actually yet realized as projects. More and more studies have also shown that the BRI tends only to be known, articulated, or even supported by specific elites in certain countries (e.g., Chen and Günther 2018; Bitabarova 2018; Liu and Lim 2018; Matura 2018; Chen and Jiménez-​Tovar 2017). Political and/​or business elites in recipient states are more likely to see the benefits that the BRI can bring to themselves, their communities, and societies, and thus start to mobilize and form networks to

Studying the BRI’s impacts and limits  45 make the BRI a reality in their countries. In this process, there occur rounds of pulling and drawing the interests of different actors in the recipient state. New projects might be created and made relevant to the BRI. Alternatively, old projects can be rebranded to become linked to the BRI. Many ideas and projects can be thrown into the bag of the BRI. Some might be carried out, while others are not. The same applies to the domestic arena in China, where actors ranging from different organs across various administrative levels would contest their ideas to win project funding. Indeed, China as a state actor does have different foreign policy objectives, strategies, and approaches to different regions of the world. Yet, several recent studies have pointed out that it is the local government actors that are driving the realization of BRI projects (e.g., Blaxekjær, Lanteigne, and Shi 2018:  449; Jakóbowski, Popławski, and Kaczmarski 2018: 17–​18; Yu 2018). Central ministries and provincial governments in the People’s Republic of China (PRC) have strived to give the BRI a meaning and find means to get funding or justify the usage of funding under the BRI banner. Chinese domestic actors do not always have a clear vision of China’s foreign policy and geo-​political interests in other parts of the world. They might act to maximize their own organization’s interests without taking into account comprehensive consideration of the broad question of China’s foreign policy interest when approaching foreign actors to build BRI projects. While these internal dynamics are important for analysis, Yu (2018) notes the difficulty in studying them because of the opaqueness of bureaucracy and decision-​making in the PRC. Actually, it can be as equally hard, if not entirely impossible, to study the internal dynamics in recipient states. In more relatively closed or authoritarian states such as Kazakhstan, garnering insights from meaningful interviewees can be as difficult. Even in more relatively open societies in Central and Eastern Europe, meaningful interviewees might prefer to keep confidential their involvement in the BRI and negotiations with the Chinese. Without understanding the internal pulling and drawing of different actors both in China and in recipient states, one cannot assume that BRI projects will materialize and even bring the intended benefits to all the actors and societies involved. Hence, despite the difficulty of finding empirical data, one cannot shy away from such a task. However, before the empirical data can be explored, there is an urgent need to put into place a proper theoretical framework for this kind of research project.

Theoretical framework Conventional grand theories of International Relations (IR), such as realism and liberalism, focus strongly on the macro-​structural level of state interests, power, and relations, which are not sufficient to explain what actually makes the BRI successful in some countries and less so in others. A  meso-​to micro-​level analysis of the actors, ideas, resources, and networks that work

46  Yu-Wen Chen to realize BRI projects is more useful. In this vein, several kinds of theories from different political science or social science approaches might be relevant here. For instance, mainstream theories of regional cooperation and integration, such as liberal intergovernmentalism, neo-​functionalism, and multi-​ level governance approaches, can be useful for us to conceptualize the role of domestic actors in pushing forward regional projects such as those associated with the BRI. These theories emphasize the important factor of economic incentives for states in increasing engagement in regional projects (Mattli 1999; Kaczmarski 2017:  1358). In connection with these, I  assume one can also examine theories related to collective actions, such as the various interest group and social movement theories that allow us to see how state and non-​ state actors would mobilize to link China’s BRI to certain states and endeavor to realize the BRI project locally. These theories to various extents are also related to network analysis and institutional theory, although each theory has its own prioritized areas of focus. Despite their differences, they all to some degree point out the importance of variables, such as actors, social or political entrepreneurs, resources, government support, and alliances/​coalitions for a particular social or political issue, for garnering support and success. However, the challenge to these conventional theories is that they tend to assume that the actors involved in a particular issue share the same understanding of it and likewise, their opportunities and limits in making change. In reality, not all issues under contention are static by nature and by perception. Also, because these state and non-​state actors from China and the targeted states work in cooperation or in competition with each other, conceptual frameworks and hypotheses related to the IR literature, particularly that of transnational non-​state actors, will be relevant. As Willetts (1982) and Risse (2001: 258; also cited as Risse-​Kappen in other works) have both pointed out, literature on transnational non-​state actors is, to a certain degree, “commensurate with the study of interest groups”. Risse-​Kappen (1999:  19–​25) suggested that the best way to analyze how transnational non-​state actors are formed and mobilized to exert influence is through a domestic structure approach. Specifically, researchers should look into the arrangement of political institutions, policy networks, and the structure of demand-​formation in civil society inherent in a particular state. Examination of these domestic structures will help shed light on what stimulates the formation of a particular interest group in a particular state. In discussing the question of under what conditions could transnational non-​ state actors exert influence, Risse-​Kappen (1994: 187) proposed that accessing the right policy-​making body and cooperating with the right allies are crucial. Keck and Sikkink (1998), however, pointed out the shortcomings of the domestic structure approach. The key problem is that this approach has so far primarily stressed the formal aspects of political and social arrangements in the studied states (Risse 2001: 266). Keck and Sikkink (1998: 202) raised the question of why human rights groups were more successful than environmental

Studying the BRI’s impacts and limits  47 groups in changing the US policies under Presidents Carter and Reagan, given that both types of groups operated in the same American political and social settings. To remedy this flaw, Keck and Sikkink (1998: 202) took a constructivist approach and suggested that researchers should consider alternative explanations such as the factors of norms and values in determining the impacts of interest groups. The successful framing of issues by interest groups will reflect the norms and values of the society that they wish to influence. It is worth mentioning that, among the theories on regionalism, there is also a “constructivist branch”. That branch supports that ideas, ideologies, and identities are the main drivers towards regionalism and regional cooperation (Acharya 2012: 187–​190). In my view, the constructivist approach is not in direct conflict with various other approaches that look at the behaviors of domestic actors. I tend to see the domestic actors as carriers of ideas, ideologies, and identities, which have no meaning without the actors that breathe life into them. I argue that Neil Fligstein and Doug McAdam’s (2011) meso-​level theory on strategic action fields (SAF) offers a useful framework to link the necessary aforementioned variables and concepts (e.g., resources, network, entrepreneurs, and identities) without assuming that all these variables are static. Fligstein and McAdam’s (2011) theory bridges the gap between the previously described domestic structure approach and the constructivist approach. The “issue” (to use Fligstein and McAdam’s term) is a strategic action field, “where actors (individual or collective) interact with knowledge of one another under a set of common understandings about the purposes of the field, the relationship in the field (including who has power and why), and the field’s rules”. The idea of a SAF is somewhat consistent with Bourdieu’s conception of a “habitus”, which is a “socially constructed arena” where actors constantly pull and draw their interests on a particular space and issue due to their contentious or unclear nature (Bourdieu 1996; Bourdieu and Loic 1992). If one looks at a particular SAF across time, one would observe the field’s nature, the coverage of actors, and their relations that can be established, broken, reestablished, defined, and redefined. In the case of China’s BRI, it has its localized field or fields in recipient states. In some countries, the field can be more organized than in others, in the sense that actors in some countries have more clear visions on how they can make use of the BRI for their benefit, as well as the resources and plans to carry out BRI projects, than actors in other countries. This leads us to the following hypotheses (which are also visualized in Figure 3.1): Hypothesis 1  –​In some countries, an unorganized social action field for the BRI can become more organized through an incremental developmental process very similar to the formation of a social movement, collection action, or mobilization. That is why the study of the BRI is related to political science and sociology theories, such as social movements, interest groups, and network analysis as illuminated above.

48  Yu-Wen Chen

Figure 3.1 Hypotheses related to the formation of strategic action field(s) for the Belt and Road Initiative. Source: Drawn by the author.

Hypothesis 2  –​Political entrepreneurs (private or public, individual or collective) are vital to the SAF for the BRI to emerge in recipient states. Hypothesis 2.1 –​Political entrepreneurs (private or public, individual or collective) find ways to translate existing rules, interests, and resources into the production of the new field for the BRI. Hypothesis 2.2 –​Political entrepreneurs (private or public, individual or collective) produce localized understanding and framing for the new field to emerge and develop. Hypothesis 2.3 –​Political entrepreneurs (private or public, individual or collective) garner supporters to cooperate and find means of accommodation with other groups. Hypothesis 2.4  –​Political entrepreneurs (private or public, individual or collective) can help produce entirely new field[s]‌). They do so by building identities of compromise that bring many groups along. In this process, every group’s identities and interests can be transformed. Hypothesis 3 –​An unorganized SAF is characterized by the frequent entry and exist of actors, no stable social relationship, and no agreement on means and ends for the BRI in the local context. This kind of drift can go on for a long time. Hypothesis 4 –​The state helps in the creation of a new SAF for the BRI as an intended or unintended consequences of state actions.

Studying the BRI’s impacts and limits  49 Hypothesis 5 –​The more connected an SAF for the BRI is to other SAFs for the BRI, the more stable the SAF is likely to be. Similarly, new SAFs for the BRI or those with few connections are harder to sustain. The aim of this chapter is not to have rigorous and exhaustive tests of the aforementioned hypotheses based on new and primary empirical data. This should be the focus of further research. What is needed at this stage is to elaborate on these hypotheses and evaluate whether one can continue to propose them using various other empirical studies from other projects. Thus, what I seek to do in the following discussion is to draw insights from existing studies in order to perform an initial examination of these hypotheses. The research method accordingly uses secondary literature. The literature I  examined consisted of the most recently published academic articles about the BRI’s implementation in Central Asia, South Asia, Southeast Asia, Central and Eastern Europe, and even countries that were not on the traditional routes where China’s Belt and Road would pass (e.g., the Polar Silk Road). This diverse empirical evidence will substantiate the theoretical and conceptual discussion.

Empirical evidence and its connection to the above hypotheses A secondary literature review of empirical studies shows the importance of the following factors in the realization of BRI projects in recipient states: government support, policy priority linkage, legacy and continuity linking past projects and BRI projects, as well as the work of local champion(s). The importance of government support from BRI recipient states Risse-​Kappen’s (1999) domestic structure approach suggests the significance of winning allies in affecting the outcome of the politics of the interest groups. The fundamental support of the government and various authorities in the targeted state has an important role to play in the success of the BRI implementation. Government support can come in different ways, from endorsing the BRI by signing a MoU, changing legal regulations to facilitate cooperation, informing business companies of the opportunities available to them, to synchronizing target states’ policies priorities with that of the BRI. As Dadabaev (2018a: 39) has suggested, the BRI is not a foreign policy doctrine but a “discursive strategy of engagement that largely exists in the realm of narration”. Hence, interested actors both from China and elsewhere have to voice their own interests and try to find a way to justify why their projects can fit within the concept of the BRI and be accepted by stakeholders, observers, and bystanders (Fasslabend 2015). In this process, there is a great deal of articulation of “self, identities, values, threats and opportunities” (Dadabaev 2018a: 39).

50  Yu-Wen Chen The first and most basic form of government support is a foreign government’s simple endorsement of China’s BRI project. To Chinese leaders, such an endorsement plays into the Chinese psyche quite well because it fits Chinese President Xi Jinping’s campaign to make China great again internationally. Foreign endorsement of China’s BRI, the Chinese project of the century, shows international recognition of China’s efforts and global contribution. It facilitates bilateral relations between China and the country that has endorsed the BRI (e.g., Matura 2018: 182). Governments that perceive the positive opportunities brought forth by the BRI are more likely to narrate how the BRI can help their countries develop, and thus help provide a political and legal framework to facilitate the matter. This is evidenced in Hungary’s signing of a MoU on the BRI with China, the first country in Europe to do so (Matura 2018). This is also evidenced in the Polish and Czech governments’ activities to make their business circles aware of opportunities accompanying the BRI (Matura 2018). In the Czech Republic, for instance, a non-​government organization called the New Silk Road Institute was set up in Prague’s University of Economics to raise awareness of the BRI and prompt European-​Asian cooperation (Matura 2018: 182). On a more rhetorical level, quite a number of countries have similarly expressed support for the BRI. However, not many have clear visions of how the BRI can match their policy priorities. The more compatibility between the BRI and the target state’s policy priorities, the more likely the BRI can be materialized in target states. Take Kazakhstan for instance. It has long used the silk road metaphor to articulate its connection with China and other Eurasian countries (Bitabarova 2018:  161). It is worth noting that the first train that travelled from Almaty (then the Kazakhstani capital) to Urumqi of China was named the “Silk Road” (Bitabarova 2018:  161). Since then, China and Kazakhstan have developed cooperation in transport and energy infrastructure connectivity matters. This predates the birth of China’s Silk Road Economic Belt (SREB), one of the two major branches of the BRI. The SREB, however, matches well with Kazakhstan’s self-​perception of “being a linchpin of the modern Silk Road”, and it also fits well with Kazakhstan’s efforts to “upgrade domestic transport infrastructure and effectively integrate it into international transport systems” (Bitabarova 2018: 161). Similarly, in Malaysia, although the construction for the East Coast Rail Link (ECRL) was at some point halted, it is now ongoing and is slated to be completed in 2024. As the largest railway project in Southeast Asia, it was able to progress according to Liu and Lim’s (2018) analysis, because it fits well with Malaysia’s pro-​Malay policy, thus making Malaysia willing to endorse the project. To be more specific, the railway will not just facilitate the connection between Malaysia’s remote areas to the more prosperous areas to boost economic development, it will also improve the connections between areas where the majority of inhabitants are Malays. This makes it easier for the pro-​Malay government to strengthen the build-​up of a stronger ethnic Malay nation (Liu

Studying the BRI’s impacts and limits  51 and Lim 2018). Murton, Lord, and Beazley (2016) also observed a similar match of interests between the Chinese and the Nepali states in Nepal’s Rasuwa District in which Nepali actors use Chinese investments to advance their country’s state formation project. These current findings directly support Hypothesis 4 which postulates that state actions will make new or redefine old strategic action fields for the BRI. To some extent, these findings also support Hypotheses 2 and 2.1 which postulate that political entrepreneurs, such as officials and decision-​makers, can make the SAF for the BRI emerge and these actors will translate existing rules, interests, and resources to produce a new field for the BRI through policy linkage. Policy linkage is so important that it deserves further elaboration in the next sub-​section. The importance of policy coordination and linking The expression of government support for China’s BRI is a basic and vital but not sufficient variable for the successful materialization of a BRI project. There should also be efforts from the target state to link its own policies to the BRI. The Czech government led by President Miloš Zeman, for instance, has been supportive of relations with China, thus resulting in an improvement in bilateral relations. The Czech government, however, has not been able to introduce the BRI to make it compatible with Czech development priorities (Matura 2018). China has been active in promoting the BRI in Prague through the invitation of Czech political, business, and scientific delegations to China (Matura 2018). Despite this, the BRI has not caught much attention in political and media debates and nothing concrete has materialized (Matura 2018). Accordingly, the BRI only plays a minor role in Sino-​Czech relations. This echoes the situations in other CEE countries as the BRI’s agenda does not really meet their needs and policy priorities where green field investment and technology are needed much more than the building of infrastructure and financial cooperation. The lack of a mutual vision and non-​compatible policy priorities led to limited results in the BRI (Matura 2018: 180). In contrast, Kazakhstan has endeavored to propose a policy linkage between their own domestic developmental program “Nurly Zhol” (in English, “Bright Path”) and China’s SREB. This linkage not only focuses on transportation infrastructure connectivity issues, but also involves a coherent plan to “organize industrial cooperation between the two countries on a broader range of areas such as metallurgy, agriculture, chemical industry, machinery manufacturing, and so on” (Bitabarova 2018: 161). Working-​level dialogues are conducted by the Kazakh-​Chinese Coordination Committee on Industrial and Investment Cooperation, which are co-​chaired by Kazakhstan’s Ministry for Investments and Development and China’s National Development and Reform Commission (CNDRC) (Bitabarova 2018:  162). As Bitabarova (2018: 169) notes, the Kazakhstani government

52  Yu-Wen Chen exercises a considerable agency in shaping the contours of the SREB development on the ground by setting its own priorities and putting forwards its own agenda. Although one cannot deny the structural effects of the power asymmetry on China’s interactions with smaller states, there is, however, little evidence in the case of Kazakhstan that China imposes its own vision or unilaterally shapes the negotiation agenda. In yet a different example, in Africa, an international governmental organization, the African Union, has taken the lead in finding synergies between its Agenda 2063 and the BRI, in the belief that this African-​bred, 50-​year development plan matches well with the BRI’s ambition to provide sustainable prosperity and peace on the continent (Ehizuelen and Abdi 2018: 294). Legacy and continuity Highly related to the importance of policy linkage is the existence of similar projects and concepts that can be easily adopted to the new framework of the BRI. Legacy, as it is called in this chapter, however, does not always ensure the easy transfer of an old project into a new one. A positive example might again be drawn from Central Asia. From the Chinese perspective, there is a continuity between the SREB and China’s Central Asia policy before the BRI, as the connectivity proposed by the SREB was also mentioned in previous foreign policy strategies and practices. Some development projects were actually already in existence within the Shanghai Cooperation Organization (SCO) framework and were further expanded under the SREB framework (Dadabaev 2018b:  6). The BRI in a way enhances Central Asia’s significance, since the region’s geographical location, both its location in the middle of the Eurasian continent and its closeness to China’s Xinjiang Uyghur Autonomous Prefecture, has now more value in the eyes of Chinese policy-​makers with respect to both external and domestic components of the BRI. When the SREB was born, observers and analysts were concerned with how China’s BRI would avoid colliding with other regional initiatives, such as the Russian-​led Eurasian Economic Union (EAEU). Russia actually started a discussion of a linkage of the EAEU and SREB. This culminated in the signing of a bilateral common understanding for “linking” (duijie 对接 in Chinese) on 8 May 2015 by Putin and Xi during the Chinese President’s visit to Moscow. These efforts will ensure that the EAEU and SREB will complement and not contradict each other (Gabuev 2016: 70–​71). Not all actors, nevertheless, may see the benefit of linking legacy efforts with the BRI. The BRI may be too overshadowed by the old legacy in these contexts. In CEE, for example, some countries find more convenience in working in their traditional bilateral frameworks or the older framework of the 16+1 network. The BRI means a third layer or label. While Hungary was the first European country to sign a MoU with China in 2015, it does not

Studying the BRI’s impacts and limits  53 have a BRI strategy or any coordination on the BRI between different governmental actors. Without the lead of Hungarian government actors, local companies are simply too small and too uninformed on the BRI to have actual interest in taking part in any BRI projects. This is also evidenced in Finland, where the so-​called Polar Silk Road is in the making and might cover the construction of a tunnel between Helsinki in Finland and Tallinn in Estonia as well as an Arctic railway that would connect Rovaniemi in Finland and Kirkenes in Norway (Chen 2020). Plans for these infrastructure projects were under heated debate in both Finland and Norway long before the BRI even came into being. Take the Arctic railway project for example. Various Arctic states, including Finland, have been conceptualizing and discussing the Arctic corridor for years. The term “Arctic corridor” in Finnish is Jäämeren käytävä, which is thought to have been coined over 100  years ago and literally means “Finland’s connection to the Arctic Ocean”. Since 2009, local entrepreneurs and authorities have made further efforts to elaborate on the idea and discuss how to realize the construction of a railway (Chen 2020). These all took place before the BRI was born. The arrival of the discursive narrative of the BRI and its connection with the Arctic, however, has marked China’s new approach to the Arctic issue. In other words, Beijing has placed the development of the Arctic under the rubric of the BRI (State Council Information Office of the People’s Republic of China 2018). But as China lacks “on the ground” knowledge of the Arctic, it has let local Finnish actors take the lead in realizing the so-​called Polar Silk Road. In the next section, we will discuss the important role of a “local champion” in the BRI recipient states and the Arctic example will be further elaborated there. The importance of a local champion in BRI recipient states Risse-​Kappen’s (1999) domestic structure approach suggests that gaining access to the policy-​making apparatus and cooperating with the right domestic actors have strong impacts on the success of interest groups. Several recent surveys of people in Central Asia as well in Central and Eastern Europe indicate that locals usually have little knowledge of China’s BRI (Hodzi and Chen 2017). Although the BRI is often seen as part of China’s charm offensive to win the hearts of locals in foreign countries, its soft power influence is quite limited (Hodzi and Chen 2017). Chinese influence through the BRI is mostly at the level of elites, specifically, with either business or political elites (Chen and Günther 2018; Chen and Jiménez-​Tovar 2017). Hence, one comes to recognize the importance of a local champion (or champions) who can ally with the right domestic stakeholders to make the BRI a reality. At a theoretical level, we should give the term “local champion” a broad definition because it varies depending on the BRI recipient state. “Local champion(s)” might include individuals (such as private entrepreneurs, politicians, officials) or collective actors (such as a government agency or a private company).

54  Yu-Wen Chen For instance, studies (e.g., Chen 2020) have indicated the important role of Finnish businessman Peter Vesterbacka, founder of the popular “Angry Birds” game franchise, in pushing forward the construction of the Polar Silk Road in Finland. Vesterbacka and his team were actually faster than the Finnish and Estonian governments in terms of approaching various Chinese actors to support the construction of a railway tunnel linking Helsinki and Tallinn. In spring 2019, Vesterbacka officially announced his success in obtaining EUR 15 billion for his project. The private equity firm Touchstone Capital Partners Ltd will contribute one-​third of the money through equity investment, thus getting a minority stake in this project. The remaining two-​thirds will be obtained through a loan. Although Touchstone Capital Partners Ltd claims to be a private equity firm, it has an OBOR (One Belt One Road) Consortium Group that includes 15 of China’s leading state-​owned enterprises (SOEs) and 15 international firms. With this, the firm has a USD 100 billion OBOR fund to expand OBOR’s related businesses. In June 2019, Vesterbacka’s firm FinEst Bay Area Development Oy and Touchstone Capital Partners Ltd further signed a MoU with three Chinese state-​owned firms to let them build the tunnel: the China Railway International Group (CRIG); its parent company, the China Railway Group (CREC); and the China Communications Construction Company (CCCC). In Finland’s case, a private businessman, Vesterbacka, was free to conduct business directly with the Chinese investors and contractors to build the Helsinki–​Tallinn tunnel, and Vesterbacka has endeavored tirelessly to frame this project as a “natural” part of China’s BRI project. Of course, not all of the affected local individuals and elites would necessarily understand nor accept that Finland is a part of China’s metaphorical Silk Road as this seems to go against common geographic knowledge and perception. Furthermore, one can imagine that Vesterbacka’s work might create tension with traditional Finnish state actors who nominally should be the leading decision-​makers and negotiators for the BRI to be realized in Finland. As of the writing of this chapter, however, Finland as a country has not officially signed any agreement to be a BRI state. The tunnel project is not even in the government’s policy program yet (Standish 2019). Vesterbacka has a long way to go to persuade the Finnish public and state actors on the merit of his work. Societal debates frequently appear in the media. For example, some opinion leaders and China experts in Finland responded to these ideas with disbelief. “I don’t think Peter Vesterbacka can build the tunnel. He is just speaking louder”, exclaimed one anonymous China expert in Finland. Or “this is all about Vesterbacka. He is the only one talking about it and endorsing it. Our Ministry (which should have a say on the BRI issue) has no say on this matter” (an anonymous informal quote). These counter-​narratives are equally important because, at the practical level, they could be galvanized into counteractions. The Finnish government, as noted previously, has created its own version of the tunnel construction narrative without implicating China. Vested interests among orators, opponents, and even spectators

Studying the BRI’s impacts and limits  55 and bystanders jockeying for influence would attest to my hypothesized SAFs for the BRI as elaborated earlier. It also supports Hypothesis 2.4 that political entrepreneurs may help induce new “fields”, but this entails a great deal of effort in building identities of compromise. In analyzing Vesterbacka’s pitch to promote the tunnel project, for example, I  find that the orator achieves the following two goals. First, he rejuxtapositions Finland to make it connectable to China’s BRI and strengthens the perspective that Finland is not just at the most northeastern periphery of Europe, but that it is actually at a location that straddles Europe and Asia. Hence, Finland’s significance is elevated by shifting the frame of reference from at the periphery to be a vital middle bridge between the East and the West. Second, Vesterbacka stresses that the whole issue is not just about building a tunnel, but what the tunnel can facilitate. That is, it has the potential to create a new center of gravity wherein a large cosmopolitan area combining Helsinki and Tallinn can boost flows of people, provide employment opportunities and other benefits, and induce an economic boom. These threads have, at the least, attempted to minimize the negative connotation of Finland as being in the northeastern periphery of Europe. A cosmopolitan area combining Helsinki and Tallinn redefines Finland’s connection to the Baltic States, thus creating a new understanding of the Nordic countries. Such a concept echoes well with famous policy expert Risto Penttilä’s call to change the conceptualization of the Nordics, stating that “it is time to open up. The New Nordics consist of the Nordic Five –​Denmark, Finland, Iceland, Norway, Sweden –​and Estonia” (Nordic West Office 2018: 4). Infrastructure links are crucial in facilitating the construction of the New Nordics. Vesterbacka also tirelessly tries to convince locals in Finland and Estonia that the tunnel will bring economic co-​prosperity for people living in the two capitals. This aligns with the Chinese BRI’s discourse to stimulate economic growth in BRI recipient states and thus spur “win-​win” situations for both sides. Overall, the work of Peter Vesterbacka supports several hypotheses related to the importance of political entrepreneurs or champions. Local champions play vital roles in garnering resources and supports to realize BRI projects. The work of political entrepreneurs can be summarized in these three hypotheses: Hypothesis 2.2 –​Political entrepreneurs (private or public, individual or collective) produce localized understanding and framing for the new field to emerge and develop. Hypothesis 2.3 –​Political entrepreneurs (private or public, individual or collective) garner supporters to cooperate and find means of accommodation with other groups. Hypothesis 2.4  –​Political entrepreneurs (private or public, individual or collective) can help produce entirely new field(s). They do so by

56  Yu-Wen Chen building identities of compromise that bring many groups along. In this process, every group’s identities and interests can be transformed. As noted, this chapter aims to offer some theoretical propositions for future empirical tests. Hence, one cannot assume these hypotheses are naturally valid. Future study should also explore exactly how important are the concepts of identities and values in making locals in recipient states accept the BRI project. Some hints of evidence have been mentioned above. But how important the concepts of identity, norm, and value are remain to be analyzed. Scholars in the study of the work of transnational advocacy networks, such as Keck and Sikkink (1998), believed that the nature of an issue proposed by transnational networks is crucial to the success or demise of a campaign. The most successful networks in Keck and Sikkink’s (1998) study were those that focused on issues that involved bodily harm to vulnerable individuals or the rejection of the legal equality of opportunity. This proposition is similar to the resonance hypothesis developed by Finnemore and Sikkink (1998), which argues that if transnational networks can create an issue or idea that resonates with pre-​existing beliefs, identity, value, and norms in the target state, they are more likely to be influential. In the case of BRI, identity could be how the locals in the target state generally perceive their geographical location and whether they think that they are situated on the broadly defined Silk Road. For example, locals in Kazakhstan would have more ideas of how Kazakhstan is on the historical silk road than locals in Finland (Bitabarova 2018: 161). Identity could also be how local elites see Chinese involvement in their countries’ development. For instance, there has been quite a lot of criticism and skepticism of Chinese investment in various countries in recent years (Matura 2018: 178; Ferchen and Perera 2019). In late 2019, the European Union even set up a partnership with Japan to advocate future construction of infrastructure with the value of transparency, sustainability and financial viability in mind (European Union 2019). This can be seen as a counter-​act to the Chinese way of investments that often lacks consideration of vital norms such as transparency, sustainability, and financial viability (Schwarcz 2019). Hence, target states will need to evaluate if they can accept the Chinese ways of operating or alternative models such as those provided by the EU or other international agencies. The emphasis on match of identities, norms, and values, in essence, comes from the constructivist line of thought and echoes a greater theoretical debate within social science about the influence of norms and values on the behaviors of states. One can posit that, if the nature of the BRI resonates or is compatible with the pre-​existing beliefs, values, and norms of the targeted state and society, the BRI is more likely to be constructed. Yet, researchers need to further tease out the exact importance of norms and values. Do they trump the importance of other factors such as resources, political entrepreneurs, etc.? This awaits further study for answers.

Studying the BRI’s impacts and limits  57 Other generic hypotheses Overall, the above discussion based on existing empirical studies implies that the scope, scale, and extent of the BRI project differs from country to country. There have been incremental processes in which collective actions were built upon to realize the BRI in different countries. The collective actions turn from unorganized to organized actions, as postulated by Hypothesis 1. This is why the studying of the BRI is related to political science and sociology theories, such as social movements, interest groups, and network analysis as illuminated above. In connection with this, we can observe that in some countries, social action fields were less organized. There are frequent entries and exits of actors into the BRI. Individual and collective actors can be drawn to take part in discussions for a while and then vanish again. This has been shown in countries such as the Czech Republic where no stable and concrete steps have been taken to realize any BRI project. It is worth testing Hypothesis 3 further in future research. Concerning Hypothesis 5, it postulates that an SAF for the BRI is more likely to be sustained when the SAF is connected to other SAFs for the BRI. In Central Asia, several states have been mustering the linking of the BRI with their countries’ development efforts (Bitabarova 2018; Hofman 2016). Russia has also taken steps to even encourage the discussion of such a linkage, between the Russian-​led EAEU and the SREB that runs through Central Asia (Gabuev 2016). Similarly, on the African continent, the African Union also has taken steps to have a more pan-​African approach on linking with the BRI. For the Polar Silk Road, both the Helsinki-​Tallinn tunnel and the Arctic railway involve SAFs from at least Finland, Estonia, and Norway. Will these cross-​border collective actions help ensure that the SAF in one particular country is not isolated and can be connected to other countries’ SAFs? Will such connectedness between the SAFs boost the success of the BRIs in several countries? It is too early for even a tentative answer to this hypothesis. However, further research should be able to report on the results of many of these cited efforts.

Conclusion This chapter problematizes the taken-​for-​granted state-​centric geopolitical approach in understanding China’s BRI and its influence. What are parts of BRI projects is negotiable. Existing sporadic studies have shown that very often the BRI is a rubric under which existing and/​or future projects can be placed. This is not just evidenced in countries where China’s planned BRI will pass but is remarkably interesting in countries located in areas that were not on the original BRI map. Several Nordic and African countries offer good examples for further study. In this vein, a bottom-​up approach that looks at

58  Yu-Wen Chen the motives, actions, and resources of local agents in potential recipient states is more fruitful than simply assuming that China has certain geopolitical interests it will achieve as it wishes through the BRI. The theoretical discussion and formulation of hypotheses in this chapter show that abundant theories of collective action and networks can be used to examine local actions for BRI projects. This opens up opportunities for testing these hypotheses against new and comparative empirical data in the future.

Acknowledgments The work on this chapter was supported by the European Regional Development Fund Project “Sinophone Borderlands  –​Interaction at the Edges” (reg. CZ.02.1.01/​0.0/​0.0/​16_​019/​0000791).

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4  The Chinese Belt and Road Initiative and its impact on democratization and de-​democratization processes Wolfram Schaffar

The globalization of authoritarianism: the role of China While the 1990s saw a global advance of democracy  –​the overthrow of party dictatorships in the socialist world, the democratization of many dictatorships in Southeast Asia and Latin America –​today, we are witnessing a reverse tendency. Liberal think tanks such as Freedom House document that, for more than a decade, countries where democracy is in decline outnumber the countries where democratic governance is deepened. More importantly, this diagnosis is also brought forward by the international non-​governmental organizations (NGOs), development agencies, and other actors who are working on the ground and notice “shrinking spaces” for their work and increasing pressure on local civil society actors. Recent analyses of the spread of authoritarianism identify China as a central actor responsible for the decline of democracy. The most prominent example of this is the March 2019 strategy paper released by the European Union (EU) (and High Representative of the Union for Foreign Affairs and Security Policy), where China is designated as a “systemic rival” that is “promoting alternative models of governance” (European Commission 2019: 1). The North Atlantic Treaty Organization (NATO) followed in December 2019 and –​for the first time  –​used similar words. “China’s growing influence and international policies” are described as “opportunities and challenges” which need to be addressed (NATO 2019). There can be no doubt that, internally, China is an authoritarian state. There is also a wide consensus that the level of repression has significantly increased recently:  with the suppression of independent unions, the persecution of intellectuals and students, the mass internment of Uyghur people (among others) in re-​education camps, and with the suppression and persecution of protest movements in Hong Kong. The origin and development of China’s authoritarianism will not be discussed here. In the present study I  will rather focus on the question of whether China is exporting its authoritarian system and whether it must therefore be considered a factor in the global spread of authoritarianism. Particularly since the beginning of China’s Belt and Road Initiative (BRI),

62  Wolfram Schaffar analysts have been debating the nature and impacts of Chinese economic activities on the political situation in the countries it is working with (Sidaway and Woon 2017). The discussion centers around to what extent China –​apart from its economic agenda  –​is also exporting its alternative, illiberal, and state-​centered development model, and therefore the extent to which it is contributing to the erosion of democracy in other countries. There are indications pointing into this direction:  The initiative’s implementation has coincided with the global wave of authoritarianism, and most of the participating countries are indeed ruled by authoritarian regimes (Hoering 2018a). Even worse, in some countries it appears that the transition from a liberal to authoritarian regime is also directly accompanied by a reorientation toward China and its BRI activities. In 2017, the Chinese central government itself has departed from its original policy to exclusively focus on economic issues in the frame of BRI and started promoting more openly its model of governance as a blueprint for other countries. One recent event was the international forum in Huzhou (Zhejiang) which was held under the title “The significance of China’s social governance to the world”.1 Apart from direct influence in form of the dissemination of knowledge on the Chinese mode of governance, the more indirect influence of China can be seen in the conflicts which occur around BRI projects. The political conflicts that have been linked to China’s influence along the Belt and Road Initiative are diverse and play out on very different levels. In Burma, ethnic conflicts are escalating along an economic corridor because of a pipeline linked to the BRI and are threatening the democratization process that began in 2012. As will be discussed later, in Thailand, the 2014 military coup can be linked to a struggle between elites for control over a high-​speed rail project linking the country to China. In the Philippines, the election of Rodrigo Duterte marked a gradual reorientation in the country’s foreign policy, away from the USA –​ for a long time its closest military partner  –​and toward China. In August 2017, roadworks in a disputed border region between China and Bhutan in the Himalayas led to a military confrontation between India and China. Many of these upheavals and conflicts have deeply affected the political system and the level of democracy in the countries concerned. This raises the question of how China’s influence can be conceptualized and analyzed. In this chapter, I  discuss different theoretical approaches and argue that a combination of world-systems theory and a neo-​Gramscian approach to International Relations can serve as conceptual frame to analyze the indirect influence of China on the political system and political orientation of a country. I will illustrate the theoretical concept with the examples of Hungary and Thailand. The two cases were chosen because they constitute iconic and important cases of de-​democratization in their respective regions. Hungary played an important role in the peaceful overthrow of the party dictatorships and subsequent democratization in Central Eastern Europe. Today, it counts as flagship for an “illiberal democracy” which challenges central parts of liberal democracy in Europe. Likewise, Thailand used to be seen as one most

The Chinese BRI and its impact  63 successful examples of democratization in Southeast Asia, especially with its strong civil society involvement in the 1998 so-​called “People’s Constitution”. After several coup d’états, today it can count only as a semi-​democratic system. For both cases, Chinese influence was discussed and both countries are close partners of the BRI. Yet, the trajectory of the decline of democracy was different in each country and reveals important insights into the political processes in question.

The role of China in political conflicts in the literature In the literature we find a varied and contradictory image. Authors from the Chinese Academy of Social Sciences (CASS) present the view that the BRI represents a new form of globalization. This estimation has been supported and positively evaluated by various other authors. Hartmann, Maennig, and Wang (2017), but also private economic actors like Siemens and McKinsey, see China as a new guarantor of free trade at a time when President Donald Trump’s USA and other countries are returning to protectionism. Authors from China like Liu, Dunford, and Gao (2018; see also Liu and Dunford 2016) instead focus on characterizing the new globalization emanating from China as explicitly anti-​neoliberal. They highlight the principles of green development (the Chinese government’s declared goal of “ecological civilization”; see Wang-​Kaeding 2018) that they believe it incorporates, or alternatively the fact that it is a form of South-​South cooperation (for a different emphasis see Rudolf et al. 2014; for a critical view see Chun 2018; Hoering 2018a, 2018b; Starrs 2018; Solmecke 2016). The question of whether and to what extent this globalization project supports democracy or authoritarianism is not in the focus of these publications. A second tendency in the literature, by contrast, sees the BRI as a sign of the rise of a new global power (Nouwens and Legarda 2018; Huotari et  al. 2017) or even a new imperialism. Embong, Evers, and Ramli (2017) draw a parallel between the geographic pattern of expansion of the maritime part of the BRI –​the 21st-​century Maritime Silk Road (MSR) –​with the beginnings of the British Empire, as the East India Company prepared its later seizure of territories by initially investing in harbors. Other authors make similar arguments, seeing an aggressive and imperial foreign policy at work in the developing countries affected (Reeves 2018) or even in Europe and Australia (Benner et al. 2018; Brady 2017), and analyze the BRI as a shift in the dynamics of global security arrangements (Ghiasy, Su and Saalman 2018). This work clearly predicts and attests an erosion of democracy and the spreading of a new authoritarianism (Benner et al. 2018) through orchestrated interventions on the part of China into the politics and civil society of the countries concerned. A third interpretive approach can be found in texts that see no coherent strategy behind the BRI –​neither a new project globalization nor new imperialism –​but rather consider it to be more an open strategy of trial-​and-​error.

64  Wolfram Schaffar This position has also been maintained by parts of the Chinese leadership, who have rejected comparisons of BRI with the Marshall Plan and insisted on calling it an initiative (changyi 倡议), thus stressing the openness and horizontal character of the BRI planning process. Concerning the question of whether BRI undermines democracy, these texts often refer to China’s non-​ interference policy, which was reaffirmed by Xi Jinping in relation to the BRI when he rhetorically redefined the “Three Noes Policy” “san bu zhengce 三不政策” (Wang and Zhao 2019: 146) formula.2 This view is also put forward by Kavalski (2019), who in his analyses speaks of “unintended effects” –​that is, political impacts that are doubtlessly linked to the BRI, but that were not planned by the Chinese authorities, and were neither foreseeable nor controllable. Building on this analysis, a fourth line of argumentation can be distinguished in the work of authors such as Kavalski (2016) and Godehardt (2016, 2014), who take the view that the new foreign relations established in the course of the BRI are linked to the traditional system of tributary states. This concept dates back to ancient China. In 221 B C E , following the subjugation of rival principalities by the Qin Dynasty, Chinese rulers called themselves emperor and considered unified China the middle kingdom (Zhongguo 中国) and thus the center of the world. According to this view, the emperor of China ruled over all the significant civilizations on Earth, an idea expressed in the concept of tianxia 天下 (which literally translates as “under heaven”, and implies something like “everything under the sun”). Neighboring states were categorized as being more or less open to Chinese civilization, and diplomatic or trade relations would only be entered into on the condition that they (formally) subjected themselves to the Chinese emperor as tributary satellites. Even if such relations entailed no actual (military) subjugation, the form of such foreign relations is inherently unequal (Lee 2016). That China increasingly perceives its own political role in terms of such categories is documented in Noesselt (2015, 2010) and Mokry (2018). Both show how Chinese political scientists are working on an alternative theory of International Relations in order to found Chinese foreign relations on something beyond the principle of Westphalian sovereignty.3 It remains an open question whether this would also entail the spread of a “Chinese style democracy” –​a type of social and political governance such as the one promoted in the international fora cited above. In distinction to these strands of debate, I will argue that a neo-​Gramscian approach (Schaffar 2018a, 2018b), based on the work of Poulantzas (1976, 1973) in connection with ideas of the world-​systems theory (Arrighi and Silver 2011; Robinson 2011; Arrighi 2007; Frank 1998), is promising for investigating the upheavals in so-​called semi-​peripheral countries and regions in times of a hegemonic transition in the world system. A  central text for this undertaking is Poulantzas’s 1975 study The Crisis of the Dictatorships, in which he interprets an inverse process taking place in his time –​namely the

The Chinese BRI and its impact  65 democratization of Greece, Spain, and Portugal in the 1970s –​as the indirect effect of a shift from one imperial center to another.

The rise of China as a hegemonic transition: a view from world-​systems theory and neo-​Gramscian political thought On the question of how the rise of China is to be conceptualized (Turowski 2017), research from the field of world-​ systems theory is particularly interesting. Arrighi and Silver focus on the development of the capitalist world system, which they trace through a number of distinct cycles and characterize as a movement of expansion (Arrighi and Silver 2011; Arrighi 2007). They can be situated in the tradition of dependency theory (Dependencia Theory, or Latin American Structuralism) with which they share that the world system is composed of three tiers  –​the core or center, the semi-​periphery, and the periphery. These tiers are systematically related to one another, that is, they are in a relation of dependency, and this determines the internal economic structures of each tier and sets limits to development options and trajectories. The development of the center and of the whole system is subject to a dynamic in which, according to Arrighi’s theory, crises play a significant role:  at the beginning of a long cycle, a country or region establishes itself as the center and expands. Arrighi distinguishes two phases within this expansion process. First there is phase A, in which productive capacities are expanded. This phase ends in a typical crisis of overproduction, which marks the transition to phase B, in which capital in the center adopts a new strategy and drives the financialization of the economy. Yet this phase also ends in a crisis, which is terminal, and which triggers the fall of the center, which is then replaced by another rising center (Schmalz 2018, 2014; Arrighi and Silver 2011; Boris and Schmalz 2009; Arrighi 2007). Arrighi and Silver distinguish four successive historical cycles:  a cycle dominated by the city of Genoa in the 16th century, which transitioned into a cycle dominated by the Netherlands in the 17th century. In the 18th and 19th centuries the center shifted to Great Britain and after World War II it shifted to the USA. They interpret the rise of China as a new relocation of the center of the global economy, as a transition to a new economic world order with a new hegemon, under which the world system –​as with the previous hegemonic shifts –​also takes on a different character. Arrighi (2007) goes so far as to see in the rise of China the emergence of a non-​capitalist kind of global market economy. In ReOrient, André Gunder Frank (1998) analyses the contemporary rise of China from a different perspective. Likewise guided by Braudel’s concept of the longue durée, he assumes that an integrated system of global trade already existed long before the colonial expansion of England and the USA –​ a global economic system with Asia at its center. He describes in detail how there was a phase of economic expansion in China from 1400 until around

66  Wolfram Schaffar 1760, which began with the opening of trade routes and the building up of productive capacities through Chinese traders, and which culminated in an expanding financial system controlled by China. This long Asian century with China at its center was followed, according to Frank, by a phase of decline from 1760. He considers the following cycle in the world system, the one dominated by England and the USA, as a rise of the West brought about by contingent factors –​a rise that was only possible at a moment when China was weakened and only by means of the West’s exclusive access to financial resources (in the form of precious metals) from the newly discovered colonies in the Americas. Like Arrighi and Silver, Frank studies the contemporary crises of the West as a transitional crisis that will lead into a cycle dominated by China. But in his view, the center is not shifting to somewhere new but returning to where it had been located since the beginning of the 15th century. In this view, developments in the 16th and 17th centuries in Genoa and the Netherlands, which are in the focus of Arrighi and Silver, in Frank’s view are only an insignificant Western appendix of a larger cycle, and only a Eurocentric historiography would attach a central significance to it. Arrighi and Silver’s periodization, and the even bigger arcs that Frank traces, can of course be criticized for their broad-​brushstrokes approach (see Meiksins Wood 2002). Arrighi’s thesis that the rise of China will also see a new, non-​capitalist world system emerge, has come under particularly strong criticism. But despite the reservations, both approaches are highly suggestive given China’s continuing development and the BRI. In connection with the BRI, Zhang (2017) takes up Arrighi’s periodization and interprets the outward-​directed Chinese investments as a sign that China has already arrived at phase B, the financialization of its economy. He reads China’s tapping of new resources and development of markets beyond its own borders as a “spatial fix” for an economy that is already struggling with a crisis of over-​production. Frank’s thesis, that China is not rising for the first time but returning to its former prominence after a contingent interruption and usurpation of its trading routes brought about by colonialism, is particularly suggestive. The Chinese leadership’s allusions to the fact that the BRI is advancing along the lines of Admiral Zheng He’s expeditions are linked to this. Zheng He (1371–​ 1433) undertook numerous expeditions on behalf of the Ming emperor in the early 15th century, setting up ports, establishing trade relations, laying the foundations for the Ming dynasty’s rise to the status of a world power.4 President Xi Jinping alludes to this historical period when he speaks of China’s rejuvenation (Zheng Wang 2013), stressing that the contemporary rise of China will only restore it to the status it enjoyed prior to its humiliation through the Opium Wars (1839–​1842 and 1856–​1860) and the resulting unequal treaties with the West (Arase 2015; Godehardt 2014). In his speech at the National Congress in 2017, Xi made it clear that this rise to a world power should be complete by the centenary of the founding of the People’s Republic of China, in 2049 (Xi 2017).

The Chinese BRI and its impact  67 In the context of a discussion about the new authoritarianism, the question arises whether the rise of China and the shifting of the hegemonic center is actually accompanied by the world system taking on a new character. From an economic point of view, Arrighi expected that the shift from the American-​dominated accumulation cycle, the Pax Americana, to the Chinese-​ dominated cycle, the Pax Sinica, marks the establishment of a non-​capitalist market economy. Without following Arrighi’s argumentation in detail, we can make the same argument for the political sphere. Against the backdrop of the global rise of authoritarianism, we have to ask whether this new world system means a shift from a dominant liberal world order towards a world system which has to be characterized by its post-​democratic Chinese-​style authoritarianism. This view would also be in line with the debate on post-​democracy which has been brought up in a different, less global and more Eurocentric debate. The notion of post-​ democracy was introduced by Crouch (2004). Discussing the decline of democracy in established Western democracies, Crouch draws into question the often-​presumed systemic connection between capitalism and liberal democracy. The liberal school of political science sees this connection in an oftentimes normative way as a relation of mutual reinforcement (Merkel 2018). Marxist scholars take the system of representative liberal democracy as the natural and only possible form of bourgeois society (Buckel 2017; Demirović 2016, 2013, 1997). Regarding the strong tendency of erosion of democratic institutions and routines in established democracies under conditions of globalized capitalism, Crouch argues that there is only a contingent connection between democracy and capitalism which reached its climax in the Golden Age of European welfare states in the 1960s, and which has been in decline ever since. The current tendency of erosion, he takes as a sign for the looming of a post-​democratic era. The rise of China and Arrighi’s prediction of a new phase of capitalism with different characteristics is beyond the focus of Crouch’s concept of post-​ democracy. However, the debate of post-​democracy has the potential to lend additional theoretical support to the expectation that the transition from the Pax Americana to the Pax Sinica is temporally and spatially accompanied by the spread of a new authoritarianism.

The erosion of democracy in the semi-​periphery: a neo-​Gramscian view If China figures as a new center of capitalism with a different, authoritarian character, how can the impact on the political system of individual countries be conceptualized? First, it can hardly be doubted that capitalism has become transnational, such that capitalist actors directly exert political influence across national borders. Yet specific political developments continue to unfold within national frameworks, and have not all been equally transnationalized. Specifically, the direct intervention of an imperial power in another country

68  Wolfram Schaffar and linking and securing access to its economy by installing a specific political system is actually the exception rather than the rule. The US intervention in Iraq is such a case, where a regime change was induced by a military intervention and a democratic system was introduced thereafter (Whitehead 2009). But China has long been characterized as a new kind of power that does not pursue an aggressive and interventionist foreign policy. This impression has been relativized by the military-​backed expansion in the South China Sea. Likewise, China is increasingly exporting arms and Xi Jinping distinctly articulated a comprehensive claim to superpower status in his speech to the National Congress in October 2017 (Kolonko 2017). But despite all of this, to date China has rarely directly intervened in a country to effectuate a regime change. Likewise, China is not known to have bound economic cooperation to certain conditions, or to have demanded from recipient countries that they align their political system to that of China. If China exports its authoritarian system, then it does so mostly indirectly. This leads back to Nicos Poulantzas, who in his 1975 book The Crisis of the Dictatorships demonstrates a way of conceptualizing political upheavals in semi-​peripheral countries. His investigation departs from a different, indeed opposed, situation, which seems counter-​intuitive for the present study: that of democratization. Greece, Portugal, and Spain were military dictatorships that were toppled by peaceful revolutions in the mid-​1970s. The countries adopted democratic regimes which then joined the EU (then the European Economic Community [EEC]) shortly thereafter. The common interpretation of the time had it that democracy had developed through the attractiveness of the model provided by the EU, which promoted democratization with its membership option and the obligations that went along with this –​a process that at the same time was sped up by the crises many countries were experiencing in the 1970s. Formerly, the countries had been dependent on the USA, which had backed the military regimes. With the rise of Europe as a new regional power bloc, they were drawn towards and integrated into the new regional hegemonic EU. Poulantzas (1976:  28) argues against such an interpretation. “[I]‌t would be quite wrong to believe that the EEC consistently played the democratic card, as it were, in order to challenge American interests which were exclusively represented by these dictatorships”. He instead identifies a political conflict within the bourgeoisie inside the countries concerned and considers the driving force to be the cooperation between certain capital factions and the popular classes. Poulantzas sees the different capital factions as being systematically connected with contradictions within the imperialist center, which the three countries were all dependent upon. For him the central point is that rivalries within the imperialist center, that is between the USA and the EU, played a decisive role in the creation and articulation of the contradictions inside the three countries. In his analysis, Poulantzas draws on some aspects of dependency theory and distinguishes between different capital factions (see also Frank 1968).

The Chinese BRI and its impact  69 He characterizes the ruling elites of the authoritarian regime as a comprador bourgeoisie, who are primarily dependent on foreign, US capital and who assert and secure their own accumulation interests through the country’s military dictatorship. These oligarchs are able to do this because their reproduction basis is located outside of the country and they therefore have no need to accept any compromises so long as military force suffices to suppress the revolts of the dominated classes. Dependency theory distinguishes this group from the national bourgeoisie, whose reproduction basis is domestic, and which therefore is less exploitative, has an interest in domestic development, and can under certain circumstances cooperate with the dominated classes in anti-​colonial liberation struggles and national development processes. Poulantzas also argues that, in Greece, Portugal, and Spain, another bourgeoisie faction gained strength through investments from Europe: the so-​called interior bourgeoisie. Its reproduction basis was situated inside the country and it had an interest in a kind of industrialization that was “less polarized towards the exploitation of the country by foreign capital” (Poulantzas 1976: 42). This bourgeoisie seeks an extension and development of the home market by a certain increase in purchasing power and consumption of the masses, which would supply it with a greater market outlet, and also seeks state aid to help it develop its exports. (Poulantzas 1976: 42) Poulantzas speaks of an interior bourgeoisie rather than a national one and notes that this capital faction is also beholden to foreign capital. It is therefore not strictly distinct from the comprador bourgeoisie, and not completely independent of it. According to Poulantzas, the interests of this bourgeoisie were not taken into consideration by the military dictatorship, which one-​sidedly represented the interests of the oligarchs. It was in the context of this conflict within the bourgeoisie that the revolts of the popular classes, which had been suffering through economic crisis and the upheavals of a dependent form of industrialization, took full effect and led to the collapse of the military governments. The concept of an interior bourgeoisie is important, as Poulantzas’s analysis identifies how this bourgeoisie, despite its links to foreign capital, was actually the bearer of a progressive project and facilitated the overthrow of the dictatorship. Yet at the same time he warns against misunderstanding the interior bourgeoisie as a national one (which would possess the potential to serve as a strategic partner in a struggle for national liberation) and against the illusion that the comprador bourgeoisie was completely stripped of its power in the process of democratization and so no longer constitutes an effective force. It is rather that the new democracy –​in accordance with Poulantzas’ theory of the state and democracy –​being something of an orderly accommodating of the interests of different factions, was a necessary step because the

70  Wolfram Schaffar dictatorships, with their one-​sided orientation toward the comprador bourgeoisie, had allowed for no other orderly mediation of interests. The process of the “decline and fall of the dictatorships”, Poulantzas argues, was significantly determined by the logic and limits of dependent development. This means that the external factors to which the countries are exposed exerted a decisive influence on them, molding them into a “dependent type of state” (Poulantzas 1976: 21). “But it is none the less clear that the concrete forms that this state assumes  –​fascism, military dictatorship, ‘democratic’ republic, etc. –​depend on internal factors within these societies” (Poulantzas 1976: 21). To this extent, Poulantzas grants a primacy to internal factors: If we maintain the primacy of internal factors, we simply mean that those coordinates of the imperialist chain that are “external” to a country –​the global balance of forces, the role of a particular great power, etc. –​only act on the country in question by way of their internalization, i.e. by their articulation to its own specific contradictions. But these contradictions themselves, in certain aspects, represent the induced reproduction of the contradictions of the imperialist chain within the various individual countries. (Poulantzas 1976: 22)

Empirical examples In light of Poulantzas’s considerations, we can now investigate how China’s rise as a new center of power and as investor impacts upon the political systems of countries in the semi-​periphery. We will then inquire into the extent to which China’s economic engagement constitutes a process of interiorization that exports contradictions from within the center  –​such as between US and European capital, and Chinese capital  –​to the countries concerned. Specifically, we need to investigate whether Chinese investments strengthen a particular capital faction, that is an interior bourgeoisie or the comprador bourgeoisie, and to what extent the collapse of democratic institutions and the establishment of authoritarian regimes can be explained by the resulting conflicts. According to the analyses of world-​systems theory, we currently find ourselves in a process of hegemonic transition. This means that the emergent center of China is in competition with the Atlantic center (Turowski 2017). According to Zhang (2017), this process is so far advanced that China is already in a phase of financialization and financial expansion, which finds expression in the BRI. Hungary Inside Europe, the Orbán government plays the role of the spearhead of authoritarianism. Viktor Orbán actually uses the term “illiberal democracy”

The Chinese BRI and its impact  71 for his style of governance, to set himself apart from the liberal consensus inside Europe (Plattner 2019). This has not only consequences for political rhetoric, but also on an institutional level. Orbán launched a number of institutional reforms which challenged the independence of the media, of courts, and the validity of core European values enshrined in the European Convention of Human Rights. Inside Europe the Orbán administration served as crystallization point and encouragement for other governments, especially in Central Eastern European countries (CEEC) to turn away from the European liberal consensus. The way of Fidesz –​the Party of Orbán –​to its current political dominant position was not straightforward. Orbán became prime minister for the first time in 1998 but lost the elections in 2002. Only since his second term, which started in 2010, has Orbán managed to consolidate his power and won a large parliamentary majority in the elections in 2014 and 2018. The central political conflict which brought Orbán into power was the political and economic transition after the fall of the socialist regime in 1990, and the political and economic conflicts which accompanied Hungary’s integration into the European Union. Specifically, the transition after 1990 followed the strategy of a so-​called shock therapy and the European integration process perpetuated these neoliberal reforms, including the expansion of European transnational capital into the Hungarian market and further cuts in the social welfare system. The pro-​European elites in Hungary who supported the economic transition and EU-​integration –​elites of all parties including the Hungarian Socialist Party –​were closely connected to big capital groups which had profited from the transition and European integration. According to the analysis of Polantzas, they can count as comprador bourgeoisie. The socialist Péter Medgyessy, who became Prime Minister after Orbán’s first term, had switched back and forth numerous times between political offices and the private sector (at the major French bank Paribas). His name became synonymous with the expansion of big European banks into the Hungarian market. Also, Ferenc Gyurscány, who took over the Prime Minister’s office from Medgyessy, has figured numerous times in the list of Hungary’s 100 richest people. By making massive cuts to social spending in his first term in office, Gyurcsány sacrificed his popularity. It was against this backdrop that Viktor Orbán could present himself as an alternative to the unpopular policies of pro-​EU capital groups. When he won the elections in 2010 and started his second term as Prime Minister, Orbán pushed through a series of economic policies which rolled back the neoliberal restructuring of the economy, including the renationalization of the pension fund and reregulation of prices for heating and electricity (Farkas 2013). He came under heavy criticism from the bourgeois European press for these economic policies and was punished by investors. However, he managed to consolidate his power, not least because of his turn towards China. Cooperation with China plays an important role for the Orbán government, primarily in its political rhetoric and as a strategy to build resistance to the EU. The Cooperation between China and CEEC (China-​CEEC or

72  Wolfram Schaffar 17+1),5 which is central to China’s engagement in the region, was founded in Budapest in 2012. Seventeen (formerly sixteen) EU and non-​EU countries meet under this banner annually and consult with the Chinese government about economic cooperation, particularly infrastructure investments. The EU has observed this process with increasing suspicion, and it is one among several other reasons why it views China as a systemic rival. According to Kavalski (2019), this 17+1 initiative has already become an independent sub-​regional integration process within and alongside the EU. For Kavalski, China has thereby become a de facto European power. After the launch of the BRI in 2013, the 17+1 initiative has become a central site for the coordination of investment projects in Europe. Here too, Hungary is taking a leading role. For example, a rail link between Belgrade and Budapest is being constructed, which is designed to speed up the transport of freight from the Greek port of Piraeus into the EU. Hungary was the first EU country to sign a memorandum of understanding (MoU) on the BRI with China. It did so unilaterally, upsetting the EU, which wanted to ensure a coordinated approach. Budapest is also the European headquarters of the Exim Bank of China, and in 2017 the Bank of China and China UnionPay launched a bank card in two currencies, the Hungarian forint and the Chinese yuan, aiming to further internationalize the latter. Moreover, since 2013 the European headquarters of the Huawei corporation have been located in Hungary. It is from there that it is coordinating activities like the construction of the 5G network in Eastern and Central Europe. The turn toward China is a recent development that dates to the beginning of Orbán’s second term in 2010. In his first term, Orbán was still critical of the idea of economic relations with China (Jacoby and Korkut 2016). From 2010, he increasingly defined his economic policy with the slogan “opening to the East” (keleti nyitás), by which he primarily meant opening up to China. Orbán defended this reorientation in words that have the ring of economic pragmatism. “We are sailing under a Western flag, but in the global economy, a wind is blowing from the East” (Jacoby and Korkut 2016: 500). But the government also justifies its course as a way of distancing itself from the EU, referring to the problems with EU integration like difficulties with the euro, a colonization of the European periphery by metropolises as well as uneven development within the EU, which results in a knowledge-​ based economy existing only in the centers (Jacoby and Korkut 2016). Orbán opposes to this a hybrid, anti-​neoliberal project characterized by the state playing a significant role in the economy and in the support of local or national capital. The example of the Chinese development model and the economic turn toward China plays a central role in the formulation of Orbán’s populist project. The question arises here of whether this amounts to a scenario like those described by Poulantzas (1976), that is, whether Chinese investments shifted the interests of the bourgeoisie in Hungary, leading the national and

The Chinese BRI and its impact  73 domestically oriented capital factions to support Orbán’s election and so bring about political change. There are a number of indicators pointing in this direction. The Chinese Wanhua Group invested heavily in the chemical company BorsodChem shortly before Orbán’s election, which at USD 1.7 billion was the biggest take-​over in the whole of Central and Eastern Europe. Among Central and East European countries, Hungary generally has the highest level of Chinese direct investment (Hanemann, Huotari, and Kratz 2019), although it is still dwarfed by the amount of European investment (see Grübler and Stehrer in this volume; Jacoby and Kotkut 2016). In terms of government bonds, the picture is more clear-​ cut. In this regard Hungary was under particularly strong pressure following the 2008 Global Financial Crisis. The previous socialist government had turned to the International Monetary Fund (IMF) to finance its budget and had received bailout credits on the condition of implementing austerity measures. Orbán campaigned against this approach, accusing his predecessors of selling off the country, and sharply criticizing the IMF and its stipulations as a form of debt slavery. He also avoided taking on any further instalments of IMF credit, and railed equally harshly against private credits based on the euro or the Swiss franc. Hungary’s credit rating dropped as a result, and Orbán turned to China for help, which was initially granted: during a 2011 visit to Budapest, Chinese Premier Wen Jiabao promised to acquire government bonds, and the China Investment Corporation (CIC) and the State Administration of Foreign Exchange (SAFE) announced the establishment of the Emerging Europe Equity Fund (Jacoby and Korkut 2016:  510). But these promises were withdrawn in 2012, and in distress Hungary passed a law offering all foreigners who acquired government bonds to a value of more than 250,000 euro unlimited residence permits—​a law fairly blatantly designed to solicit money from China. It is only with the planning of the high-​speed rail link from Belgrade to Budapest that we can speak of the return of substantial investment flows. Like Wanhua’s take-​over of BorsodChem, the rail project stands out from all the others due to its investment sum of EUR 3.2 billion (Rogers 2019: 86). Yet it also promises to have a long-​term impact, as the Hungarian government is hoping that the direct and high-​speed connection from the port of Piraeus will make Budapest a hub for the arrival of Chinese products in Europe. Rogers (2019) sees the rail project as a further step by the Orbán government to create and serve a loyal bourgeoisie. Szelényi (2016: 22) also calls it a long-​term political calculation on Orbán’s part: When they lost in a close electoral competition [in  2002], Mr. Orbán acknowledged one mistake he made while prime minister:  he did not create his own bourgeoisie. This is a mistake one does not make twice. As he won election comfortably in 2010 and 2014, he made an effort to create and maintain a loyal base and its core had to be a propertied bourgeoisie.

74  Wolfram Schaffar Gonda (2019) also sees this strategy operating behind the expropriation of land, which has resulted in the creation of a new class of big landowners loyal to Orbán over the course of his mandate. In summary, Chinese capital has played a substantial role in strengthening the position of a domestic bourgeoisie and was therefore an essential factor in Orbán’s rise in 2010 and his consolidation ever since. China did not directly intervene in domestic politics in Hungary. But its investment –​especially the investment connected to the BRI –​helped Orbán to formulate an alternative economic vision. Orbán promised to strengthen the domestic bourgeoisie that had been under pressure in the course of the European integration since Hungary became an EU member state in 2004. This augmented a political conflict between the EU-​oriented comprador capital groups on the one hand, who were the power base of the Socialist Party, and the domestic capital on the other hand, whom Orbán managed to integrate as his power base. Thailand Until the turn of the millennium, Thailand used to be considered a flagship of democracy in Southeast Asia. Especially in the 1990s, when the pro-​ democracy movement in 1992 was able to push back the military, paved the way to a comprehensive constitutional reform and to the promulgation of the ‘People’s Constitution’ in 1998, Thailand was seen as a role model how to accomplish and consolidate democracy in a developing country. Today Thailand counts as a prominent example of the rise of authoritarianism in Southeast Asia. After the coup d’état in 2014, the military came back to power and has sponsored a new constitution which perpetuates its dominance. A general election in 2019 which was neither free nor fair concluded the transition to a political system which can at most be described as semi-​ democratic. Strict censorship of the internet in combination with a draconian lèse-​majesté law serves as tool to suppress dissident voices. The courts, which are corrupt and biased in favor of the royal-​conservative elites, have dissolved several oppositional parties and effectively disabled any meaningful political organizing. The increasing numbers of forced disappearances and killings of opposition leaders inside Thailand as well as in exile have created an atmosphere of fear. While Thailand until 2005 was rated by the Freedom House index with highest scores as “free”, since 2014 it is consistently assessed as “not free” (Cook 2020). Basic political and human rights are being breached (Amnesty International 2020). The government shows strong parallels to the authoritarian regimes in Austria (1933–​1938) and those in Portugal and Spain in the 1930s which also count as a particular type of historic fascism (Schaffar 2018c). This scenario of de-​democratization unfolded against the backdrop of a political polarization which started in the early 2000s. It is closely connected to the rise of Thaksin Shinawatra, who was elected prime minister in 2001. After the Asian financial crisis in 1997/​1998, Thailand had to ask for bailout

The Chinese BRI and its impact  75 credit at the IMF which was granted on condition of liberalization and opening of the Thai market for foreign investment and implementing austerity measures. While the old Bangkok-​based capital factions were considerably weakened through the crisis, a new capital faction around Thaksin succeeded in strengthening itself, among other factors through new business contacts with neighboring countries in Southeast Asia and China. He was able to translate the opposition to the IMF-​imposed austerity measures into political power and, in his term as prime minister (2001–​2006) Thaksin succeeded in stimulating high growth rates within a short period of time, on the basis of his dual-​track economic policy –​a combination of neoliberal restructuring and extensive infrastructure and social security programs. Because this capital faction around Thaksin was oriented towards development in the provinces, it can be described as a domestic bourgeoisie. Businessman Dhanin Chearavanont, until 2017 CEO of the Charoen Pokphand Group, the world’s biggest producer of animal feed, became one of Thaksin’s trusted advisors. Today he is the richest person in Thailand and ranked 79th on the Forbes billionaires list (Forbes 2019). Together with Dhanin, Thaksin, himself a billionaire, planned and implemented development programs such as the “Thailand: Kitchen of the World” project, which aimed to wean the country off rice exports and steer it toward the export of processed and high-​value food products. In a second project, the “One Tambon One Product” scheme, the government made public funds available to each Thai tambon (sub-​district) for it to specialize in the production of a specific product, the global marketing of which would also be funded. By contrast, the old elites in Bangkok constitute a comprador bourgeoisie. They are focused on the capital city of Bangkok, which served as the headquarters of the country’s exploitation during the colonial period.6 This capital faction is grouped around the Thai Crown Property Bureau, which manages the assets of the royal family (Porphant 2015). In 2011, the King of Thailand was estimated to be the world’s richest monarch (Forbes 2011). This capital faction can be described as comprador because over the past few decades it has established an economic system that has made Thailand the country with the world’s highest levels of inequality. Meanwhile, with the internationalization of the Thai economy, the old Bangkok-​based comprador bourgeoisie has developed into global agents of transnational capital. Under their influence, as will be shown later, Thailand resembles a semi-​colonial formation from the mid-​19th century, in which resources from the provinces were sold off and informal labor was overexploited. The political polarization unfolded between these two camps. On the one side was Thaksin and the political parties close to him who  –​on the basis of the social welfare programs and the successful development programs in the provinces –​managed to win all free and fair elections with a comfortable majority.7 On the other side were the Bangkok-​based royal-​conservative elites, who felt threatened by the unprecedented power of the new economic and

76  Wolfram Schaffar political power bloc and who used their exclusive access to the military and the judicial system to remove Thaksin and his parties from power through a series of military and judicial coup d’états.8 The final round of this contestation over political power, and the final blow to democracy in Thailand happened between 2011 and 2014 and was connected to the BRI. Thaksin’s sister Yingluck Shinawatra, elected as prime minister in 2011 with a large majority, negotiated Thailand’s incorporation into the BRI’s high-​speed rail network with China and signed a cooperation agreement. According to her plans, the project was designed to fit with the previous development paradigm of the domestic bourgeoisie: Yingluck promoted the project by promising Thai farmers new markets in China. Like small and medium-​sized businesses, they would simply be able to hop on the train with their products and sell them in China. Competition to control the course of the mega-​project, however, intensified between the two capital factions. In late 2013, the royal-​conservative bloc organized protests against Yingluck in Bangkok and sued her in the Constitutional Court to be disqualified and removed from office. The allegation was that her plans to build high-​speed train tracks on the basis of massive Chinese investment would create irresponsibly high debt and constitute a case of mishandling the national budget. Eventually, the old elites organized a military coup in May 2014 and removed Yingluck from power. Tellingly, the plans for high-​speed train tracks, which were presented as the reason to remove Yingluck from power, were not abandoned, but implemented by the new military government –​now in close in cooperation with the royal-​conservative capital faction (Schaffar 2018b; for another view see Trin 2019). The different capital factions reoriented themselves under the changed political relations of the new authoritarian system: for example, the animal feed manufacturer CP, formerly an ally of Thaksin, now cooperates with the new rulers (Schmidt and Natnicha 2019). Yet the economic project of the old elites has transformed the cooperation with China and the BRI project into a rather colonial enterprise:  the primary economic project of the military government is known under the name Eastern Economic Corridor. Huge investments from CP and the Chinese corporations Alibaba and Huawei of around USD 53 billion are set to flow in for the construction of a smart city east of Bangkok, which will be internationally connected with three airports and high-​speed rail, and which will set new standards for digital and networked production, modern convenience, and consumer lifestyles (Schmidt and Natnicha 2019). The smart city zone, which is set to become six times larger than Shenzhen in China, is being developed a few kilometers east of Bangkok, in a region that already has the highest concentration of capital and the highest income levels. In addition, a ring of special economic zones is to be created on the borders with Burma, Laos, and Cambodia. These zones will house industry that employs migrant laborers from the country’s poorer neighbors, who will not receive the Thai minimum wage and who will have only limited workers’ rights. Critics have compared the

The Chinese BRI and its impact  77 system that is developing with colonialism, as it existed for example in Hong Kong under British rule: “A colonial era is emerging in the EEC area through Thai-​Chinese investment policies” (Schmidt and Natnicha 2019; Somnuk Jongmeewasin, cited in Pratch 2017). China’s investment in Thailand has therefore triggered a political development that runs counter to what we saw in Hungary. In the beginning, in Thailand, just as in Hungary, a new, domestically oriented capital faction rose to power and challenged the old elites which were loyal to and depending on the US and Western powers. Thaksin and also later his sister Yingluck used their connection to China to consolidate their development strategy and included welfare schemes in their development agenda to buy in the poor electorate in the North and Northeast. Yet, different from Hungary, the old comprador elites in Thailand reacted boldly to this challenge and used political violence to resist any shift in power balance. They staged a coup d’état, drove Thaksin and later his sister into exile and established an authoritarian regime in order to suppress any resistance and to keep control of the economic opportunities connected to the BRI. So eventually the comprador elites have prevailed and implemented a neo-​colonial system, now directed to China as the new economic center.

Conclusion Hungary and Thailand constitute two iconic cases of the global rise of authoritarianism which have been discussed in connection the BRI and Chinese investment. In both cases, formerly consolidated democracies eroded and developed authoritarian regimes. The two authoritarian regimes, however, show very different characteristics. In Hungary Viktor Orbán came to power through elections, was re-​elected twice, and enjoys the continuous support of the majority. The Thai military Prayuth Chan-​o-​cha, by contrast, came to power by a coup d’état and had to procrastinate and manipulate elections in 2019 to stay in power. Neither of the regimes was directly installed or supported by the Chinese government. The influence of China is indirect. Just as Poulantzas (1976) discusses at the example of the regime changes in Greece, Portugal, and Spain in the 1970s, different capital groups inside Hungary and Thailand, their development strategies, and their connections and loyalties to transnational capital play a crucial role in mediating the influence of China. In Hungary as well as in Thailand, we find one capital group which on the basis of their transnational orientation can be characterized as comprador bourgeoisie. In Hungary, it is the pro-​EU elites, in Thailand it is the royal-​conservative block around the Crown Property Bureau. In both countries, these elites and their outward oriented, neoliberal economic project is shattered by an economic crisis and challenged by the rise of a new capitalist group. These newcomers have their base inside the country, favor state-​led development schemes, and are challenging the neoliberal agenda through infrastructure and welfare

78  Wolfram Schaffar programs. They are tapping into Chinese capital, specifically investment from the BRI to strengthen and consolidate their position. The struggle and rebalancing of power inside the countries, however, yielded very different outcomes. In Hungary, Viktor Orbán managed to consolidate his popular electoral base through a populist illiberal anti-​EU discourse. This explains the anti-​LGBTIQ*, anti-​feminist, anti-​refugee rhetoric with which he defends his policies. In Thailand, however, the old comprador elites reacted to the challenge of the new domestic capital with political violence and overthrew the popular elected governments of Thaksin by military and judicial coups. The military and judicial suppression of the popular will, including censorship of the press and intimidation by forced disappearances, characterizes the nature of the authoritarian regime in Thailand. The rise of authoritarian regimes was triggered by Chinese investment or investment opportunities, but only indirectly. The conflict between rising China and the EU or the USA on the world stage was interiorized through capitalist groups of a comprador character and more domestically oriented groups and translated into power struggles. This supports Poulantzas’s concept of the primacy of internal factors:  Chinese investment did not cause, but rather augmented pre-​existing conflicts and fueled existing internal power struggles. Hungary and Thailand are only two examples of the development of authoritarianism under the influence of rising China and the new Chinese-​ US/​EU rivalries. I have shown that Poulantzas’s concepts can help to analyze the mechanisms and trajectories through which the BRI influences the political development of specific countries. The concepts can also help to explain the resulting patterns of authoritarianism. However, more research along these lines of neo-​Gramscian political theory is needed to complement the present study with data from Latin America, Africa, and other areas in order to get a more complete picture of the global rise of authoritarianism and its connection to the rise of China.

Notes 1 In the Chinese media coverage former Prime Minister Jiří Paroubek of the Czech Republic is cited with the statement that “The Chinese social-​political model is an attractive one for many developing countries. Each country should choose its own best economic and political model” (Xinhua News Agency 2019). 2 The “Three Noes Policy” is a formula which goes back to the Taiwanese diplomatic doctrine of 1979, which stressed that the Republic of China (ROC) will have “no contact, no compromise and no negotiation” with the Communists in the People’s Republic of China. When Xi Jinping used the formula “Three Noes Policy” and spelled it out as “(1) no interference in the internal affairs of other nations, (2) China does not seek to increase the so called ‘sphere of influence’, (3) China does not strive for hegemony or dominance”, underlines the different character of the PRC’s foreign policy (Wang and Zhao 2019: 146).

The Chinese BRI and its impact  79 3 Westphalian sovereignty refers to the principle of state sovereignty and by extension the system of international relations based on it, which arose at end of the Thirty Years’ War (1618–​1648) and which is founded on the interaction of formally equal sovereign states. 4 The question of the historic role and legacy of Zheng He is highly contested. Whereas for a long time the dominant interpretation was that his expeditions were costly and extravagant adventures which did not yield any economic return and were abandoned after his death, more recent historic research carved out a more long-​term impact of his journeys on the Ming dynasty’s economic and diplomatic success (Hui 2010; Tan 2009). 5 The former name of the initiative was 16+1. Since Greece joined the talks, they are referred to as 17+1. 6 Thailand was never formally colonized. Yet from 1855, Chinese merchants established a semi-​colonial system in conjunction with the monarchy, which was also descended from a merchant dynasty. The extraction and exportation of resources was organized from the port city of Bangkok by the comprador bourgeoisie there (Schaffar 2018b; Evers, Korff, and Pas-​Ong 1987). 7 Elections were held in 2000, 2005, 2008, and 2011. After Thaksin Shinawatra fled to exile in 2006 and his party, the Thai Rak Thai was dissolved, new parties were founded which were close to him and largely controlled by him. 8 In 2006 Thaksin was removed from office by a military coup d’état. In 2008 the ruling party Phak Phalang Prachachon which was close to Thaksin, was dissolved by the Constitutional Court and a new government by the Democrat Party, close to the royal-​conservatives, was installed. The incident was then called a judicial coup d’état.

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5  China’s faltering normative power drive in Kazakhstan Gaziza Shakhanova and Jeremy Garlick

Introduction The purpose of this chapter is to analyze attitudes towards China’s Belt and Road Initiative (BRI) –​as well as China-​related issues more generally –​in the Kazakh media and among influential people who are involved in the opinion-​ making process, such as state officials, academics, and journalists. The BRI is an ambitious plan to develop Asian regions and to connect them with each other and with Europe by land and sea routes. The initiative was announced to the world in a 2013 speech by Xi Jinping (Xi 2014: 315–​319) at Nazarbayev University in Kazakhstan’s capital city Astana (now renamed Nur-​Sultan). The fact that Xi gave such a highly significant speech in Kazakhstan suggests that the Beijing government views Nur-​Sultan as a vital partner in the BRI. Kazakhstan’s central position on the route from China to Europe –​labelled the Silk Road Economic Belt (SREB) –​allied with its energy resources such as oil (which the ever-​growing Chinese economy urgently needs) confirm the importance of the nation as an essential part of Xi’s flagship foreign policy initiative. However, the attitudes of Kazakh elites and media concerning the implementation of the BRI have not been sufficiently evaluated thus far. To collect data, we conducted two forms of primary research in Kazakhstan. The first took the form of discourse analysis of media outputs published between January 2013 and June 2019 in the Russian and Kazakh languages. These outputs consisted of reports, interviews, and articles written by journalists giving information about BRI projects or announcing BRI-​related events. Discourse analysis is understood here broadly, focusing more on general content of the materials rather than specific linguistic strategies. We were mainly focusing on searching for positive, negative, and neutral connotations which appeared in relation to BRI-​related media reports. The connotations of an output were assessed qualitatively according to the informational content of the item examined. The second part of the research consisted of 14 semi-​open interviews, which were conducted in Astana and Almaty and in one case in Moscow. The interviewees were all either citizens of Kazakhstan, based in Kazakhstan, or

China’s BRI in Kazakhstan  85 had close ties to the country. The respondents were: a government employee, three researchers at state-​owned research institutes, four experts in political studies, two economists, three journalists from Astana and Almaty, and one Kazakh representative to the Eurasian Economic Commission in Moscow. Additionally, the standpoints of two more individuals obtained at the BRI-​ related conference in Astana in December 2018 have been included: one sinologist and one researcher in social and political studies in a state-​owned research institute. We conducted the interviews in December 2018 and January 2019. The interviews were not recorded on an audio-​device because of the reluctance of the respondents to allow such a recording. Instead, detailed transcripts were made during the interview process. The interviews were conducted in the Russian language and the results were coded manually. The interviews spanned several topics, with BRI-​related questions being only part of them. The lengths of the whole interviews were between 40 minutes and 3.5 hours. In the main, our respondents seemed to be well informed on BRI-​related issues and keen to comment on them. Here we again did not analyze linguistic strategies, limiting our scope to evaluating the respondents’ opinions as positive, negative, or neutral. We directly asked the respondents to evaluate the BRI and its impacts and generally received quite definite answers, so the classification of opinions turned out to be relatively unambiguous. In 2019, there were 3,328 registered media in Kazakhstan, among them 2,790 printed newspapers and magazines, 128 TV channels, 70 radio, and 340 information agencies and internet media (Ministry of Information and Social Development 2019). In this article our analysis was limited to 40 media outlets (29 non-​state media outlets, including oppositional newspapers and foreign media represented in Kazakhstan and 11 state-​owned media outlets), which altogether published 169 articles on BRI-​and China-​related issues and which were accessible on the internet. The search phrases included: “Silk Road Economic Belt”, “Belt and Road”, “Sinophobia in Kazakhstan”, “Chinese investment projects”, and related phrases. The 169 media reports included in our analysis were all the documents that we found using these search phrases, so there was no conscious selection or filtering of data except for the search engine, the search phrases, and the choice of the time period. We grouped the sources into two major groups: (1) state-​owned media which are state-​owned newspapers, TV channels, and websites (these are media reports from four TV channels, three newspapers, and four news sites); (2) non-​state media which also include private, oppositional, and foreign media present in Kazakhstan (these are media reports from ten newspapers, including two magazines, 16 news sites, and one TV channel). There were two foreign media outlets included as non-​state media: the Russian information agency Sputnik and the US-​sponsored branch of Radio Free Europe, Radio Azattyq. Throughout the article we sometimes use the term “private media” to distinguish other non-​ state media from the oppositional and foreign media. Among the analyzed reports from state-​owned media, the most common sources were the newspaper Kazakhstanskaya Pravda and the news site

86  Gaziza Shakhanova and Jeremy Garlick Kazinform, which released 5 and 9  percent of all the analyzed reports respectively. The number of printed copies of Kazakhstanskaya Pravda is around 100,000 per day. The reported numbers of visitors on the websites on 17 October 2019 were 17,093 for Kazakhstanskaya Pravda and 61,861 for Kazinform. Among the private media, the largest amount of analyzed reports was published by two news sites, and They released 9 and 7 percent of all the reports, respectively. The reported month average number of daily visitors in October 2019 was 64,287 for www.365info. kz and 323,113 for We have decided not to use the size of the audiences in our analysis, mainly because the data are often self-​reported and difficult to compare. Instead, we have considered all the reports we could find using the preselected method of search and weighed them all equally. During our analysis we have not noticed indications that this approach is significantly misleading. Especially, it seems that the groups as we have defined them (state media, non-​state private media, non-​state oppositional media, and non-​state foreign media) provide good categorization of data and individual sources within these groups do not differ too much in their attitudes towards the BRI. (Perhaps with the exception of foreign media, which consisted of two quite different sources: the Russian media-​agency Sputnik and the US-​sponsored branch of Radio Free Europe, Radio Azattyq.) One final remark is appropriate here. Since we have considered only those reports that were accessible through Google search, we have excluded a large amount of material, mostly from regional newspapers. This also suggests that the current analysis is probably more precise with respect to the urban as opposed to rural audience.

China’s normative power drive in Kazakhstan There is a body of literature (e.g. Shambaugh 2015; Kurlantzick 2007) examining the notion of Beijing’s global “charm offensive” to increase China’s soft power in the first two decades of the 21st century. The use of the BRI as a vehicle to promote Chinese influence by ideational means has also been studied (Callahan 2016). For the purposes of this chapter we follow Kavalski (2013) in depicting China’s efforts to create an ideational space in which its foreign policy may be accepted by citizens of other states as an attempt to generate normative power. Kavalski (2007, 2010) also links China’s normative power drive directly to its efforts to “socialize” Central Asia by gradually establishing Chinese practices as normal. In Kavalski’s framing, China seeks not merely, as soft power theory (Nye 1990, 2004) would predict, to attract other countries through its cultural artefacts and economic incentives, but actively to shape the norms of the interaction within which it attempts to generate consensus and hegemony (Diez 2013). It is by shaping Sino-​friendly norms and acceptance of a beneficent Chinese presence that the Beijing government hopes to increase China’s influence. China’s shaping of the overseas foreign policy environment to suit its needs

China’s BRI in Kazakhstan  87 has also been framed more pejoratively as Bourdieu[s]‌ian symbolic power (Bourdieu 1991), a term which denotes the attempt by the hegemonic actor to dominate while concealing its true intentions and the intrinsic asymmetry in bilateral relations (Vangeli 2018:  676). However, in this chapter, in an attempt to gain analytical clarity and to maintain scholarly detachment as far as possible, we frame China’s ideational drive in Kazakhstan as normative rather than symbolic power. A second body of literature which must be considered here is that which defines Central Asian attitudes towards China in terms of Sinophobia (Vakulchuk and Overland 2019: 118; Kassenova 2017: 113; Owen 2017; Alff 2016:  450; Wilson 2016:  121). Sternberg et  al. (2017:  8) report “distrust of Chinese intentions and perceived economic hegemony and land grabs by China”, while Le Corre outlines fears in Kazakhstan “of Chinese rushing into their underpopulated nation of just 18 million people spread over a territory comparable in size to India” (Le Corre 2018). This chapter therefore addresses the question of the extent to which it is correct to understand Kazakh interpretations of the Chinese presence in Kazakhstan through a Sinophobic framework. For this reason, the media discourse analysis and interviews of influential local actors are situated against the background of the literature which presents the case that Kazakhs fear and resent Chinese activity in their country. The analysis reveals that defining Kazakh attitudes towards China as Sinophobic constitutes an over-​simplified narrative framing. Among previous studies of Kazakh media representations of China, the most notable is Burkhanov and Chen (2016), who explore how the image of China has been constructed in public-​and private-​owned media in Kazakhstan. They conclude that the state-​owned media promote a positive image of China, while the private media picture China neutrally, and Kazakh language sources do it in a more hostile way. The research findings regarding Kazakh media and elite attitudes towards China outlined in this chapter support and expand upon those of Burkhanov and Chen, placing them within the framework of the Chinese attempt to establish normative power –​i.e., acceptance of the increasingly hegemonic Chinese economic presence –​in Central Asia.

China-​Kazakhstan economic cooperation This section briefly illustrates economic cooperation between Kazakhstan and China in the era of China’s BRI/​SREB investments, which is accompanied by a normative power drive to gain acceptance for Chinese economic activity. It will not only provide a general understanding of China’s ongoing activities in Kazakhstan since the late 1990s, but also identify which areas of Chinese activity have been most targeted by criticism in the media. The two states’ cooperation can be divided into three major parts: (1) cooperation in energy; (2) national transport and infrastructure plans; and (3) Chinese investments in industrial projects in Kazakhstan. All of these areas are now subsumed by the Chinese under the umbrella of the BRI, but joint work on all of them,

88  Gaziza Shakhanova and Jeremy Garlick particularly the first and third parts, predates the introduction of Xi Jinping’s flagship foreign policy initiative in 2013. Regarding the first point, energy cooperation with China started in the late 1990s with access to oil deposits being granted to Chinese companies such as CNPC (China National Petroleum Company), SINOPEC (China Petroleum & Chemical Corporation), and CITIC (China International Trust Investment Corporation). According to different experts, China extracts between 25 and 40  percent of all the oil extracted in Kazakhstan. It is also worth mentioning CNPC’s share of 8.33 percent in the North Caspian Operating Company, the operator of the Kashagan oil deposit, with estimated reserves around 4.5 billion tons (KazMunai Gas company 2019). In parallel, the two governments also cooperated on the construction of the Kazakhstan-​China oil and gas pipelines. The oil pipeline connects the oil deposits in the west of Kazakhstan with the Xinjiang region, while the gas pipeline is a constituent part of the Central Asia-​China gas pipeline which also channels gas supplies from Turkmenistan and Uzbekistan to China. As for the second point, transport and infrastructure coordination with China in the era of the BRI has progressed as follows. After agreeing to join the SREB land route (the “belt”) with the national plan (Plan 2016), the political authorities in Kazakhstan began more actively to rebrand the country as an ideal transit zone which connects the East (the Kazakhstan-​ Chinese border) with the West (the Caspian Sea) and Central and Eastern Europe (CEE), and also provides an exit outward to Iran and the Persian Gulf and to Lianyungang port and the Pacific Ocean. Within the period 2009–​2018, the investments (budget investments and borrowed resources) in roads and infrastructure reached USD 30 billion (Khabar 24 2019). Among the projects which aim to provide unproblematic transit of Chinese cargo to Europe are:  (a) the Western Europe-​Western China highway (out of 8,445 km, 2,787 km pass through Kazakhstan); (b) the Kazakhstan Temir Joly (KTZ)-​Khorgos Gateway dry port on the Kazakhstan-​Chinese border; (c) the Aktau and Kuryk ports on the Caspian Sea; and (d) a logistics terminal in Lianyungang port. Besides serving the BRI’s goals, these projects also aim to solve transit problems for export of local goods. This is of utmost importance to the national government as it has been working hard to modernize the resource-​based economy since roughly 2003 and break out of the state’s land-​locked status: thus, state-​owned companies are also constructing terminals in Bender Abbas (Iran), Klaipeda (Lithuania), and Mundra (India). Lastly, Chinese infrastructure investments have increased since the advent of the BRI. Fifty-​one contracts, together worth USD 26.2 billion, were signed in 2015 as a result of frequent visits by President Nazarbayev and Prime Minister Massimov to China (subsequently the number of the contracts increased to 55). The agreed projects range from a dry port in Khorgos, on the China-​Kazakhstan border, to energy infrastructure, factories, and access to natural resources deposits. However, these contracts became an object

China’s BRI in Kazakhstan  89 of heavy critique from local experts and national intelligentsia in 2017–​ 2018. More specifically, local experts questioned the financial and technical conditions of the contracts and the competence of the national authorities which were concluding these agreements. It is interesting to note that these reactions are the first instance of a more vocal criticism targeted against some aspects of Chinese involvement in the Kazakh economy after more than two decades of China’s economic presence in the country. In 2018, the Minister for Investment and Development noted that the final list of projects had not yet been delineated: In general, the list [of the projects] changes every year. We have meetings in the Chinese Ministry of Commerce every quarter. Due to the market’s flexibility some of the projects were excluded, while the new projects have been included. But we are constantly keeping control over the priority projects for the sum of USD 27–​30 billion. (Kapital 2018) This suggests that for the Kazakh authorities the principal task was to get financing from China. Nevertheless, in September 2019, some of the projects were finally publicly revealed (Ministry of Industry and Infrastructural Development 2019), probably under the pressure of anti-​Chinese protests in a number of Kazakh cities.

Chinese BRI and Chinese investments in Kazakhstan: positive versus negative perceptions Our research into Kazakh media discourse concerning Chinese BRI investments in the period from 2013 to 2019 reveals a more mixed and complex picture than might be anticipated. This reveals inevitable fluctuations over time in the degree of Kazakh acceptance of increasing Chinese influence in Kazakhstan amid various developments. Figure  5.1 demonstrates an increase in reports published by state-​owned and private media starting from 2016. The rising trend is linked to three events: the inclusion of the state infrastructure program Nurly Zhol (Bright Path) (Postanovlenie Pravitel’stva Respubliki Kazakhstan “Ob utverzhdenii Gosudarstvennoĭ programi infrastrukturnogo razvitiia ‘Nurly Zhol’ na 2015–​2019 godi”1) in the BRI, the signing of 51 investment contracts with China in 2015, and the 2017–​ 2018 critique of those contracts’ transparency in private and oppositional newspapers. In 2018, media reports responded to protests against inter-​ethnic marriage in the Almaty region, and a protest at the China-​owned enterprise in Shymkent. In 2018, Radio Azattyq, the Kazakhstan branch of Radio Free Europe, also became active as it highlighted the problem of internment camps in Xinjiang region, which borders Kazakhstan. Finally, an increase in media reports emanating from the Chinese Embassy is also discernible between 2016 and 2019.

90  Gaziza Shakhanova and Jeremy Garlick 50


40 30 20 10 0



0100 0 2013


0 0 2014


7 10 1 2015

13 5

00 0 2016

16 10

12 54 2



15 2018

8 02



Private (including Azattyq, Sputnik)


Azattyq, Sputnik


Figure 5.1 Quantity of media reports on the BRI and China in Kazakhstan in 2013–​2019. Source: Authors’ analysis.

Notwithstanding the fact that the BRI is mainly concerned with technical aspects like transport and infrastructure projects, the media –​both state and private –​have often reflected BRI-​related news in a propagandist way. This suggests an initially high degree of success for China’s normative power drive in support of BRI investments and projects. Sometimes the reports were personalized by stressing the contribution of presidents Nazarbayev and Xi. For example, emphasis is often placed on the fact that the SREB was first announced by Xi Jinping in Astana. Nazarbayev is referred to as the person who was the first supporter of Xi’s idea. Some media even went so far as to stress the number of times that Xi referred to Kazakhstan during his speech in the Beijing forum (Kazinform 2017), or reported that Nazarbayev was given the third most prominent seat on the stage next to Xi and Russia’s Vladimir Putin (KTK 2019), which is supposed to be a sign of Nazarbayev’s and Kazakhstan’s high recognition. In parallel, some media have also started to advertise Nazarbayev’s concept of “G-Global” as something akin to Xi’s concept. For the most part, the BRI has been portrayed positively in the media (see Figure 5.2). Journalists and pundits depict Kazakhstan’s industrial development as directly dependent on China and its investments. China was often even described as a savior of Kazakhstan after the 2012 financial crisis and the BRI was presented as a new development model. In line with this attitude, any China-​related issues with a negative connotation were avoided by the media due to the belief that stirring Sinophobia would derail the implementation of the BRI/​SREB and threaten the country’s economic growth. Alongside the media depictions, the respondents whom we interviewed also seemed to be supportive of BRI and cooperation with China in general.

China’s BRI in Kazakhstan  91 68

70 60


50 40 30 20 10 0



0 Neutral





Negative Oppositional

0 Positive State-Owned

Figure 5.2 Media discourse on the BRI in Kazakhstan in 2013–​2019. Source: Authors’ analysis.

Their affirmativeness was rooted in two main points. First, within the BRI, Kazakhstan has an indisputably good geographical location and logistics. In the long run several interviewees believed the country will overcome its geographical distance from external markets and obtain access to them (interview with a journalist, Almaty; interview with a senior official, Astana; interview with a political expert, Almaty). Second, for Kazakhstan, China has been a reliable partner since the 1990s and cooperation has so far appeared positive (interview with an economist, Astana; interview with a journalist, Astana). One interviewee praised the success of the “oil-​processing plant in Shymkent with 4,000 Chinese workers; a CNPC activity in Aktobe; and Petro China in Kzyl-​Orda” (interview with a journalist, Astana). Indeed, in sharp contrast to the widespread popular stereotype that China has expansionist plans in Kazakhstan, our interview respondents demonstrated quite the opposite perception and even demanded that the government get involved with the BRI more actively. Comments of this type included the following: “We should not waste our time!”; “[We need] to grab our benefits! We should not be modest! We should play on contradictions: to steal Chinese investments from other states”; “By using Chinese investment, we are interested to become a part of the global project”; “We must be active, we must take big dividends from it” (interviews with a senior official, Astana; a journalist, Almaty; a political expert, Almaty; a former official and economist, Almaty). However, a single voice among the respondents doubted that BRI would help to change the structural imbalances of the Kazakh economy which remains excessively dependent on mineral resources: “[just because of the BRI] we are not going to produce iPhones” (interview with a head of a state-​run research center, Astana). Such belief in the BRI’s positive effect for Kazakhstan surprisingly stood in sharp contrast to the respondents’ views concerning Kazakhstan’s other

92  Gaziza Shakhanova and Jeremy Garlick key neighbor, Russia. The respondents’ opinions revolved around two main topics: Kazakhstan’s importance for the BRI is more significant than Russia’s; and Kazakhstan needs to cooperate closely with China as Russia becomes economically weak. For example, a senior official from Astana claimed in an interview: For China, the Russian direction is not a priority … Why does China need the Baikal-​Amur railway when they need to develop their western lands? Why do they [China] need [to develop] the Northern Marine Route when the main sea routes have been already established? Several respondents also pointed out that the Chinese economic capacities exceed the Russian ones (interview with a senior official, Astana; interview with a journalist, Astana; interview with an economist, Astana). In the end, the argument in favor of dealing with China was justified by the negative experience with trading with Russia within the Russia-​led Eurasian Economic Union (EAEU): making trade with Russia is very difficult for Kazakhstan’s business. Therefore, a reasonable question arises: Why should we not try [to trade] with China? China has given us a port in the Pacific, while with Russia we could hardly ever get something similar. Russia is an unpredictable partner. Today they say “yes”, tomorrow they say “no”. Even though bypassing Russia would cost more money and take more time, in the end, it is better to avoid crossing it than to cross it. (Interview with an economist, Astana) Although the BRI itself has remained mostly untainted by negative reports, there was a related critique of the investment agreements signed with China in 2015, with most of the coverage being released in 2017–​2018 (see Figure 5.3). Even though then Prime Minister Sagyntayev instructed the ministers to popularize the benefits of the contracts in 2018, the private and oppositional media seemed to act differently to state media. More specifically, the independent media were concerned with the technical and financial characteristics of the projects and their potential detrimental effect for the environment, as a certain part of population believed that only outdated production would be relocated to Kazakhstan. More specifically, the media highlighted the projects’ ill-​preparedness which came as a result of China dealing directly with Kazakhstan’s officials, an approach prone to corruption. The most vocal critic of the projects in the media was the sinologist Konstantin Syroezhkin, who is very famous in Kazakhstan. He wondered why the technical details of the projects financed by China under the guarantees given by the Kazakh government were not transparent: In the big projects, China demands a state guarantee. If we [Kazakhstan] provide such guarantees, these transactions must be transparent. This is

China’s BRI in Kazakhstan  93 7 6 5 4 3 2 1 0 2013 Corruption

2014 Debts

2015 Ecology




Badly planned projects

2019 Visa problems

Figure 5.3 Media discourse in Kazakhstan on investment contracts signed with China. Source: Authors’ analysis.

even needed, so that the populace would not become negative [towards the Chinese projects]. (365info 2018) In February 2019, Syroezhkin was detained under the accusation of disclosure of state secrets, and sentenced to ten years imprisonment in October the same year (Tengrinews 2019). A similar critique came from the oppositional newspaper DAT, which publishes in the Kazakh and Russian languages: the national authorities were blamed for being seduced by Chinese money and for increasing the national debt, which reached USD 12.3 billion (DAT 2018). In some cases, the negative attitude was extrapolated from the perception of China in Russia and Africa (DAT 2017). Furthermore, the previous experience with the implementation of oil contracts signed with China, from which the population in Kazakhstan had not benefitted, was also transposed onto the current Chinese projects (DAT 2017). In August 2018, the leaders of the Kazakh intelligentsia even sent a letter to President Nazarbayev in which they demanded he reconsider oil contracts with Chinese investors. While stressing the increasing debt to China, the local media and pundits also blamed the national government for lack of competence. For example, the sinologist Syroezhkin criticized the government as follows: In many countries which are situated along the old caravan routes the bureaucrats have a comprador psychology. This is not something new. However, it is [even] in the interests of China to make all the projects maximally transparent … In the case of conflict, the Chinese could

94  Gaziza Shakhanova and Jeremy Garlick say: “Guys, nobody has compelled you to implement these contracts. You have signed the contract. Do us a favour and fulfil all the terms including paybacks on the credits.” (Argumenty i Fakty 2018; translation by the authors) He also mentioned the absence of rigorous studies on BRI-​related issues in China and Kazakhstan:  “It seems that all [the research institutes] are concentrated on spreading propaganda, which no one needs” (365info 2018). Criticism of the national authorities was also found among our respondents. A journalist from Astana complained: Why did they [the authorities] not react to the reeducation camps in China? Because we have PetroChina, CNPC, and an oil-​processing plant in Shymkent, we have Chinese investments. Why should they [the authorities] worsen the relations with China? In the end, however, the respondents were generally supportive of the BRI, even to the extent of defending Chinese investors when China, despite being among the top ten investors, had not been given a visa-​free regime. For example, the same journalist claims: In Kazakhstan the state apparatus is weak. If they fear that the visa regime could be violated by Chinese, then just fine them [the Chinese], but they cannot take decisions based on phobias. The journalist from Almaty noted in the interview: There are too many [investors’] interests in Kazakhstan: the state system will work until they pump all our oil off.

Sinophobia in Kazakhstan: projection of social problems or “primordial” nationalism? The question of Sinophobia is of great importance to the progress of the BRI in Kazakhstan and the Chinese normative power drive in support of it. The success of the BRI seems to be directly dependent on the perception of China, since the government and state-​owned media have been actively trying to suppress any Sinophobic sentiments. When attempting to explain the motivations for Sinophobia in Kazakhstan, media often refer to four reasons (see Figure 5.4): (1) Sinophobia is a part of historical memory and the consequent cultural differences complicate understanding of China by the population; (2) Sinophobia is an after-​effect of Soviet propaganda; (3) Sinophobia is stirred up by the Kazakh intelligentsia and regional economic clans; (4) Sinophobia is stirred up by Western, American, or Russian propaganda. In our analysis, media reports examining the phenomenon of Sinophobia

China’s BRI in Kazakhstan  95 25


20 14




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Figure 5.4 Topics of media discourse on Sinophobia in Kazakhstan in 2013–​2019. Source: Authors’ calculation.

often came as a response to certain events like the anti-​Chinese protests that happened between 2016 and 2019. These were: the 2016 protest against land lease extension for foreigners; the 2018 protest provoked by a marriage between a Kazakh woman and a Chinese man in Talgar in the Almaty region, which (the marriage) later became the object of heavy critique on social networks and resulted in a state-​sanctioned protest (Azattyq 2018a); and the 2018 protest at Shymkent enterprise. Lastly, the increase in the number of reports in 2018 was also related to the problem of the Xinjiang reeducation camps, on which we mostly focus in this section. Not surprisingly, we did not encounter many Xinjiang-​related reports in the state-​owned media. There were some rare articles which reported the efforts of Kazakhstan’s Foreign Affairs Ministry to help the ethnic Kazakhs in Xinjiang, and the publicity of the Xinjiang case was linked to the tense relations between China and the US. The reeducation camps were presented as an internal affair of China and labelled by some pundits as “centers of ideological re-​forging [of people]” in which “the ideological work with the dissidents” is carried on (Sputnik Kazakhstan 2018). Media and pundits claimed that stirring Sinophobia in Kazakhstan serves to derail the BRI/​ SREB. The critics of China among Kazakh intelligentsia and regional clans were hastily labelled as bearers of primordial or “cave” Sinophobia, no matter whether they questioned the social consequences of investment contracts signed with China or the rights of Kazakhs in Xinjiang. Apart from the Kazakh intelligentsia, the roots of Sinophobia were claimed to stem not only from the US or the West but also from Russia. For example, Aydos Sarym,

96  Gaziza Shakhanova and Jeremy Garlick a widely cited political expert who struggles for protection of Kazakhstan’s cultural authenticity, claimed: [You may] like it or not, but the existence of a strong China restrains the aggressive imperial plans of Russia, it restrains Russia from [implementing] the Ukrainian scenario [in Kazakhstan]. It would be a strategic mistake to allow the relations with China to deteriorate by pushing it to a quiet conspiracy with Russia. We see now how China has been trying hard to solve the situation with the Kazakh diaspora while not damaging its prestige or losing face. Today the Chinese Ambassador speaks in our press a dozen times more than the Russian Ambassador! This [BRI] opens [for us] a window of opportunities but that window will be closed if we follow the way of loose populism and “cave” Sinophobia. (Central Asia Monitor 2019; translation by the authors) The problem of reeducation camps started to be discussed around 2017 during the All-​World Kazakh Kurultay (the Kazakh diaspora meeting) held in Germany (Azattyq 2017). In the media, one of the most frequently noted cases was that of Sayragul Sautbay, an ethnic Kazakh and Chinese citizen who worked in one of the reeducation camps. After deciding to quit the position she was accused in China of disclosure of state secrets. Because her passport was taken by the Chinese authorities, she had to flee to Kazakhstan illegally. Even though a Kazakh court decided not to deport Sautbay back to China (which was even celebrated as a good sign by many compatriots in Kazakhstan) she was not granted Kazakh citizenship and had to ask for asylum in Sweden. One of the most active reporters on the Xinjiang issue was Radio Azattyq, the Kazakhstan office of Radio Free Europe, which published interviews with many ex-​prisoners (for example, Azzatyq 2018b, 2018c). Among the activists who helped the prisoners and their families is the Ata-​Zhurt organization (in Almaty), whose leader Serikzhan Bilash, an ethnic Kazakh and ex-​citizen of China, was accused of stirring up inter-​ethnic hatred between the two nations and put under house arrest in March 2019. After pleading guilty, he was released in August 2019 under the condition that he would not engage with the problems of ethnic Kazakhs in China in the following seven years (Delovaya Nedelya 2019). Another movement which tried to attract attention to Xinjiang’s problem is Jana Qazaqstan Forum (in Almaty). Instead of appealing to the Kazakh government directly, their leaders sought the support of the US Congress in Washington. After coming back, they were blamed in the media for serving American interests and accused of using the Xinjiang issue to attract attention to their own political agenda. It is, however, true that sometimes the movement hugely exaggerates their claims. For example, Amirzhan Kosanov, Jana Qazaqstan’s leader, argued that the only thing which was left for Kazakhs in Kazakhstan was the land, while the rest –​ homes, knowledge, and the future –​was lost.2

China’s BRI in Kazakhstan  97 In the main, despite some reservations, our interviewees perceived China positively, indicating some success for the Chinese normative power drive in support of the BRI/​SREB. For instance, one respondent, a former official and economist in Almaty, attempted to reconstruct China’s historical role for Kazakhs in the corresponding fashion: China saved us from the Dhungar [invasion], while Russia had unleashed them [the Dhungar] upon us and supported them with arms. [The Kazakh poet] Shakarim chose to stay in China, nobody attempted to murder him there. They [China] preserved the historical memory [of ethnic Kazakhs]: the Kazakhs live there happily. This line, when the Chinese and Kazakh sides allied together against Dhungar tribes, was also reflected in some media reports which tried to recast the Soviet exposition of history as one made up against China (Caravan 2018; Central Asia Monitor 2018). There was a single voice among the respondents which was cautious about China, a Eurasian commission official in Moscow: In the 2000s, when we were students, there was a widespread saying: “You can marry anybody except the Chinese!” Yes, a fear that China would conquer us was so overwhelming. Also, one more interviewee highlighted that both Russia and China “are uncomfortable neighbors” (interview with an economist, Astana). However, compared to Russia, “China is acting cautiously; they even do not touch Mongolia” (interview with the head of a state-​run project, Astana). In the end, a sincere willingness to understand China was explicitly made in this interview with a political expert in Astana: For us, there are two Chinas:  “China as a Dragon” and “China as a Panda.” The “Dragon” is related to the Chinese economic presence [in Kazakhstan], the 2016 land protests, the Xinjiang issue. The “Panda” is related to access to technologies, mobiles, the beauty of Shenzhen and Shanghai, such personalities as Jack Ma and Jackie Chan. Unfortunately, “Panda” is not a stable case …

Discussion and conclusion In Kazakhstan, around three-​quarters of the media coverage presents the BRI in a positive way (see Figure 5.2). The journalists, the pundits, and the officials pin their hopes on the economic boost that BRI could soon bring to their country. For the state-​owned media such a positive attitude is not surprising, since they aim to advertise the success of the state infrastructure program Nurly Zhol, which became a part of the BRI in 2016. As it seems, private media have mostly remained in line with the official narrative by

98  Gaziza Shakhanova and Jeremy Garlick framing BRI-​related projects as largely successful. Such heated issues as the lack of transparency of investment contracts signed between the governments of Kazakhstan and China in 2015 or detention of Xinjiang Kazakhs in reeducation camps in 2017–​2018 were mainly limited to coverage in oppositional and international media present in Kazakhstan and in a small number of other private sources (see Figure 5.4). The reluctance of state-​owned media to broach uncomfortable issues goes hand in hand with the official position which interprets any anti-​Chinese critique as a threat to the state’s economic development and internal ethnic harmony. Another interesting point is the formation of an alliance between the state, the media and the Chinese Embassy, which have clearly coordinated their efforts to influence popular perceptions (see Figure 5.1). The embassy has acted as an agent of China’s normative power drive by placing propaganda materials in the press and organizing free tours for Kazakh journalists to China.3 The state-​owned media and the Chinese embassy even undertook some joint measures to improve the public perception of China.4 As a result, the BRI has become a fashionable topic in the media and Xi Jinping has become the most frequently mentioned person in relation to the BRI, even ahead of former President Nazarbayev.5 The negative coverage related to China has largely been limited to the investment agreements signed between the two governments in 2015 (see Figure 5.3). Ultimately all the parties, that is the government, the media, and the national intelligentsia, seem to follow an accommodative policy whenever a negative reaction towards China surfaces. However, elites in the government and media, flattered by the state’s entanglement in the Chinese plans and, as they claim, leaving Russia behind, seem to have failed to appreciate the social premises for Sinophobic sentiments among the populace. In the period studied, the private media, following the official line and, perhaps, being “socialized” by the Chinese Embassy’s normative power drive, chose not to question much the financial details of the investment projects signed with China and ensconced themselves in a position of loyalty to both the state and China. In this situation the voices of ethnic Kazakhs in China have been nearly silenced as they have mostly been restricted to oppositional, international, and a few other private media. The third elite group, the national intelligentsia, went a bit further in debating the ecological and financial consequences of the agreements signed with China, and alluding to the Western principles of democracy and human rights when protecting their compatriots in Xinjiang, but revealed a degree of inconsistency when they failed to condemn the pernicious protests against marriages between Kazakh women and Chinese men. Overall, China’s normative power drive has clearly had a high degree of success in shaping and “socializing” Kazakh elite acceptance and even promotion of the BRI/​SREB; but whether this success and the consequent propagation of China and the BRI has reduced the general population’s tendency to Sinophobia remains a moot point in need of further research.

China’s BRI in Kazakhstan  99

Notes 1 The program was prolonged until 2025. 2 The video is available at:​watch?v=gaWVVumkk-​Y&t=2643s [1:11:30–​ 1:12:40]. In June 2019, Jana Qazaqstan Forum decided to stop their activity. 3 We have noticed several cases when the same report had been placed by the Chinese Embassy in private and state-​owned newspapers. For example, a report under the same title: “ ‘Odin poias –​odin put´’ –​put´ vzaimovigodnogo razvitiia i sovmestnogo protsvetaniia Kitaia i Kazakhstana” [“One Belt –​One Road” is the way of mutually beneficial development and shared prosperity of China and Kazakhstan] was published in Delovoy Kazakhstan (2018), Kazakhstanskaya Pravda (2018), and Kazinform (2018b). In the last article, it was explicitly denoted as “Provided by Embassy”. Sometimes the media reports resulted from free press-​tours to China organized by the Chinese embassy. 4 One of the forms of cooperation was a competition for the journalists for the best report on the coordination between BRI and Nurly Zhol, see for example: Kazinform (2018a). 5 In our analysis, Xi Jinping was mentioned in 84 documents, while Nursultan Nazarbayev in 66 documents.

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6  Malaysia and China’s Belt and Road Initiative A trilogy of commitment problem, diplomacy, and strategic foreign policy Farizal Mohd Razalli Introduction This chapter explores commitment problems in diplomatic bargaining. It asks the following question: when two (or more) countries engage in a diplomatic bargaining to reach a settlement or an agreement, how can one be sure that countries will follow through with their committed promises or hereafter termed as commitment? The Malaysia-​China Belt and Road (BRI) diplomacy is presented in this chapter as a rather special diplomatic engagement in which much of its substance is legally binding, reflecting the contractual nature of the BRI projects.1 As Malaysia’s early BRI diplomacy occurred under two different administrations with diametrically opposed political positions over the initiative, there existed a real issue of continuity in Malaysia’s overall commitment toward the BRI.2 Far from being time-​inconsistent, Mahathir’s administration entered into a highly strategic diplomatic game with China. A change in Malaysia’s attitude was a teaser to entice China to rewrite the terms and rules of the BRI game. But the latter must be convinced that the former is trustworthy enough to follow through with its commitment before rewriting the terms and rules. With an extremely delicate balancing between national interest and diplomatic expediency, the Malaysia-​China BRI diplomacy features the issue of commitment problems. This chapter situates the Malaysia-​ China BRI diplomacy within this notion of commitment problems in international politics. With most of the commitments being legally binding, violations entail serious legal implications on the part of the contractee and damage the interests of the contractor. The propensity for violations increases with changes in the contractee’s circumstances both physically and non-​physically, thus augmenting the likelihood of a credible commitment problem.3

Commitment problems and diplomacy Unlike other bargaining situations, diplomatic bargaining has peaceful properties (see Barston 2006; Berridge 2005). After all, diplomatic bargaining  –​ negotiation –​is a “war” by peaceful means (Meerts 2015: 3). When countries

104  Farizal Mohd Razalli engage in diplomatic bargaining, it sends the message that the parties are willing to give something up in order to win something in return. It also signals their mutual preference for peace over violence in settling disputes. To use the game theoretic terminology, such a signaling for peace should convince parties that violations –​commitment problems –​in the already agreed settlements or terms will be implausible. Unfortunately, there is just so much to an actor’s trust. For game theorists, for as long as there exist promises and threats, actors cannot be absolutely sure of their counterpart’s behavior (Bueno de Mesquita 2016; Tadelis 2013; Ellingsen and Johannesson 2004). Reneging on diplomatic promises or pledges is often translated as lying in laymen’s terms. Claude (1981), however, used “casual commitment” to refer to diplomatic lies. Diplomatic commitment is always non-​binding and therefore almost casually made. It is a gesture of good faith with often empty rhetoric. Of more recent scholarship on lying in international politics is the work by one of International Relations’ (IR) most reputable theorists, John Mearsheimer (2011). His work is revolutionary in the sense that it brings street behavior to bear upon elitist and sophisticated foreign policy-​making and diplomatic bargaining. His theorizing of the behavior has tremendously helped in viewing the act of lying as a strategic tool for statecraft and distinguishable from other subterfuge means like spinning and concealment. But even if diplomatic commitments are non-​binding, dishonoring them still has political repercussions. In international diplomacy, not keeping one’s word in a consistent fashion is damaging over time, as states’ reputations matter significantly, if not the most. What is more, behaving inconsistently in keeping pledged commitments will render states as untrustworthy. This includes violating international norms manifested in international law principles, e.g., honoring treaties, conventions, and commercial contracts. To an extent, this constitutes a deviant behavior that, if unchecked, can naturally lead to states being labelled as rogue states (Wagner, Werner, and Onderco 2014:  2–​4). Although the chapter does not necessarily suggest dishonoring international commitments as a prerequisite for naming rogue (or pariah) state, it is a symptom that will make a deviant state lose its credibility and good status. Mainstream works on status and credibility in international relations are anchored by a strong emphasis on power  –​neorealism. The source of a country’s status (a country’s prestige) in international politics is the recognition of its physical possession of such power resources and its ability to use them to achieve its intended objectives (Gilpin 1981:  31). It is what Robert Gilpin (1981:  31) himself called reputation for power. This chapter, nonetheless, sees the account of prestige of Gilpin and his other neorealist colleagues as somewhat narrowly defined. As another respected neorealist scholar, John Mearsheimer, would correctly observe, such a power-​driven prestige only applies to relationships between great powers. For Mearsheimer (2003), the issue of status (prestige) only matters when countries reach the level of great power. The chapter views such a conclusion to hold water only

Malaysia and China’s BRI  105 in power-​driven credibility. When credibility is driven by commitment, the issue of status or prestige becomes a concern regardless of a country’s rank in the hierarchy of the international system. The issue of commitment problems in international politics is not new. A handful of works on commitment problems can be found in war studies as well as in conflict resolution literature. Many of these works have excellently contributed to path-​breaking findings in trying to understand the nexus between commitment problems and the occurrence of wars or conflicts in general. They include Fearon (2004), Powell (2006), and Slantchev (2003). There are other works that, while not focusing specifically on commitment problems and wars, do suggest the symptomatic role of the former in the latter:  informational problems (Powell 2006; Slantchev 2003; Wagner 2000; Fearon 1995), and bargaining indivisibilities (Goddard 2005; Hassner 2003). Outside war studies, scholars in game theory have also been instrumental in advancing research on commitment problems. Recent work by Spaniel and Poznansky (2018), in formally modelling credible commitments to executive reforms in the US intelligence community in the 1970s, problematizes the cost for undertaking such a commitment. Contemporary works on international treaties, i.e., Hathaway (2003) and Gaubatz (1996), also contribute to analytical understanding of the role of commitment problems in international human rights negotiations. Most of the aforementioned literature pays close attention to explaining causes of commitment problems. In fact, existing literature on commitment problems links such problems to causes like differential rates of economic growth, offensive advantages (Leventoglu and Slantchev 2007; Fearon 1995) and temporary shocks to government capabilities and legitimacy (Fearon 2004). Yet very few go beyond showing how such commitment problems can be adequately resolved. Identifying the existence and continuity of commitment problems is just part of the story. This chapter argues that analyzing and resolving them proves to be equally important. To be fair, however, the literature does capture some interesting works that resolve the commitment problems. Through game theoretic modelling, Wolford (2012) attempts to explain the relationship between leadership turnover and commitment problems. Leadership turnover may produce significant foreign policy changes when leaders –​incumbent and successor –​differ in their preferences over the resort to war and peace, especially when the successor cannot commit to implementing the incumbent’s policy. Wolford’s research, while focusing on the outcome of war, still bears significant similarity with this chapter’s focus in that both trace the source of commitment problems in the leadership change. But while Wolford’s research suggests leadership as solutions to commitment problems that it creates in the first place, the present chapter looks at institutions –​diplomatic bargaining –​as the solution. At least a few works are worth a mention at this juncture; both Hathaway (2003) and Kalyvas (2000) attempted to providing a workable solution to commitment problems. The former found that making the punishment

106  Farizal Mohd Razalli more severe for non-​compliance is not necessarily the best way to tackle commitment problems  –​in this specific case, to comply with human rights treaty provisions. In fact, the intrinsic diplomatic motivation of ratifying international treaties, e.g., human rights treaties, is in and of itself an important preliminary step toward desired behavioral change albeit over a long period of time. It is the diplomatic process that will address commitment problems, i.e., governance and domestic compliance over time (Hathaway 2003: 1857). Kalyvas, meanwhile, problematized democratization processes involving religious political parties. Even when these religious political parties are willing to comply with the emerging democratic order, they face a serious commitment problem as they find it difficult to signal credibly that, once in power, they will subject themselves to the democratic control. Kalyvas’s research found that established, centralized, autocratic, and hierarchical religious institutions can have a positive effect on democratization processes because they make it possible for religious political parties to overcome commitment problems. Hathaway’s and Kalyvas’s findings resonate well with the role of institutions in overcoming commitment problems. Such an institutional role in resolving commitment problems fits nicely within this chapter’s overall framework, although Hathaway’s diplomatic process aligns better with the chapter’s focus than Kalyva’s proposed structural institutions. Having said that, however, the chapter’s notion of diplomacy goes deeper than that of Hathaway. Sir Peter Marshall (1990) distinguished six features of diplomacy. They are as following: content of foreign affairs, conduct of foreign policy, negotiation, diplomatic service, manner of conduct, and diplomatic skills. With the exception of diplomatic service, all the other five features of diplomacy are relevant to this chapter. Three of these five particularly stand out, namely negotiation (Berridge 1995; Watson 1982), manner of conduct (Satow 1979), and diplomatic skills (Cohen 1981). The idea of linking negotiation to diplomacy was mooted by Adam Watson when he defined diplomacy as “negotiations between political entities which acknowledge each other’s independence” (Watson 1982: 33). G.  R. Berridge further refined this definition by characterizing diplomacy as “the conduct of international relations by negotiation [peaceful means] rather than by force (…) which are either directly or indirectly designed to promote negotiation” (Berridge 1995: 1). But conducting negotiations not only requires substantive competence but equally important are procedural and strategic competence. The procedural competence reflects the knowledge about the manner on and context of how to conduct negotiations. Ernest Satow referred to this as both intelligence and tactfulness (Satow 1979: 3). Reflecting on Asian diplomacy, Deepak Nair’s (2019) recent work on face-​saving in Asian diplomacy is worth mentioning here. He brought the much under-​theorized phenomenon in IR into the mainstream literature on

Malaysia and China’s BRI  107 diplomacy. In fact, it is one of the (signature) features in the diplomacy of the Association of Southeast Asian Nations (ASEAN) couched within Asian cultural exceptionalism (Nair 2019: 672). Scholars outside IR, namely those from Sociology like Erving Goffman and Pierre Bourdieu (1994), have all identified face-​saving as a cultural trait found outside Euro-​American societies, thus making significant when observed as a diplomatic strategy in the conduct of diplomacy within the Asian region –​Southeast and East Asia. Having understood the manner in which to conduct negotiations  –​ diplomatic bargaining  –​diplomats must craft the right and appropriate strategies to navigate through the negotiations. Cohen understood craftsmanship of diplomats to include shared norms and rituals apart from a shared language, characterized by courtesy, non-​redundancy, and constructive ambiguity (Cohen 1981: 32–​35). Two core normative themes are central to diplomacy –​coexistence and reciprocity. “Unless people realize that they have to live together [in coexistence], indefinitely, in spite of their differences, [diplomacy] ha[s]‌no place to stand” (Mattingly 1955:  196). Coexistence implies, if not equality, at least equal rights to participate in international intercourse, hence it is capable of facilitating a settlement (Jönsson and Aggestam 2009: 37). Meanwhile, (diplomatic) reciprocity implies that exchanges should be of roughly equivalent values (Jönsson and Aggestam 2009:  37). Reciprocal behavior guarantees good for good, ill for ill. There are two distinguishable types of reciprocity: specific and diffuse reciprocity. While the former obliges parties to exchange exactly equivalent reciprocation, the latter does not. On average in real world diplomacy, diffuse reciprocity is more commonly observed just as Keohane (1986) did, “quid” for every “quo”. Shared language is another trait that members of the diplomatic corps adhere to when exchanging diplomatic communiqués. The institutionalization of diplomacy has made possible the development of a common language with ritualized phrases. These ritualized phrases have enabled cross-​cultural communication with minimum misunderstanding. Three features, namely courtesy, non-​redundancy, and constructive ambiguity define the diplomatic language. Diplomats or diplomatic agents in general, on many occasions, have to communicate unpleasant things with each other. Nonetheless, this has to be done with a very tactful and courteous manner so as not to offend each other; this is where ritualized phrases come in handy. They also help diplomatic agents to maintain ambiguity constructively where “circumlocution, such as understatements and loaded omissions, permits controversial things to be said in a way understood in the diplomatic community but without needless provocation” (Cohen 1981:  32–​34). But while maintaining ambiguity, diplomatic agents still express enough meanings to allow intentions to be understood. As Cohen aptly put it, “a diplomatic communication should say neither too much nor too little because [for] every word, [the] nuance of omission will be meticulously studied for any shade of meaning” (Cohen 1981: 32).

108  Farizal Mohd Razalli

Modelling the diplomatic game The foregoing literature sets the commitment problem as an analytical variable and how its resolve may have consequences on a country’s status or reputation, better termed as prestige in international relations. This chapter assumes that, in binding diplomatic engagements, the consequences from non-​committal (dishonoring) behavior might prove to be pernicious in that not only status or reputation will be at stake but the interests of all the parties involved will be compromised. Such an assumption is important for at least two reasons. First, by deciding to renegotiate the terms of the BRI projects, Malaysia could not avoid but to demand more than what China was willing to concede. This effectively signals to Beijing that Putrajaya was vulnerable to abandoning its commitment. Secondly, as a result of the first reason, China quickly found itself in an equally vulnerable position where its commercial as well as political interest was in peril. Make no mistake, however, Malaysia’s interests were also at stake as refusal by China to renegotiate had maneuvered Malaysia into a precarious position. Such a predicament leads to another key assumption  –​that Malaysia’s commitment problem must find its solution in a diplomatic bargaining that would address both Malaysia’s and China’s vulnerabilities. As the renegotiation began, demands and counter-​demands by both parties continued, reflecting the multi-​stage bargaining models (Rubinstein 1982). This chapter, however, does not remodel this multi-​stage bargaining. Rather, the chapter models the substance of the diplomatic bargaining where the intricacies of honoring behavior, interests, and diplomacy are made to bear upon resolving Malaysia’s commitment problem.4 The potential variability in the honoring behavior constitutes the uncertainty in the game which incentivizes dominion whenever possible. The models’ key contribution to the existing literature is how diplomacy is being captured into the equation –​existing literature has bridged diplomacy and games (Rudnianski and Bestougeff 2007) but does not incorporate diplomacy into the solution –​to help both Malaysia and China find the optimality in their strategic interaction. Additionally, the model may also have implications beyond Malaysia and China to include other BRI partner countries across continents. Since the initiative was officially launched, Malaysia has been one of the strongest supporters in the region. The then Najib Razak administration was seen as open and welcoming to the Chinese initiative. Without bringing in the scandalous aspect of the deal (Doig 2018), suffice to say that the previous administration successfully entered into several big deals with Beijing on mega infrastructure projects like the ECRL line (USD 13 billion), Melaka Gateway (USD 10 billion), Kuala Linggi International Port (USD 2.92 billion), and Samalaju Industrial Park Steel Complex (USD 3 billion) (Jaipragas 2017).5 These deals were entered into within the rubric of the BRI’s government-​to-​ government framework. Thus, while they were diplomatic in nature, they were

Malaysia and China’s BRI  109 also legally binding as they were signed under the framework of commercial contractual agreements. This then effectively transforms an issue of diplomatic support into an issue of honoring the BRI. Unlike ordinary diplomatic support, which is fluid and non-​binding, pledges made within the BRI framework entail honoring these pledges or commitments. This would have been easy under the same government of the day. In cases where the government of the day changes, such commitments become extremely difficult to keep.6 The fateful 10 May 2018 where Malaysia saw her first change of government since independence bore witness to this. With criticisms mounting during the campaign trail over allegations of Najib’s administration selling off the country’s assets to Beijing, very few would expect the new government under Mahathir to keep the already signed deals. True to his word, Mahathir sent the nerve-​wrecking announcement across the South China Sea upon taking office for the second time, after his departure in 2003. He was determined to call off ongoing projects and cancelled pending deals previously signed with China. His justification was purely material, suggesting that most of these deals were made under very scandalous terms that go against Malaysia’s interest (Carvalho et al. 2019). This chapter analytically views Mahathir’s action from two strategic vantage points. First, his strong criticism kept his reputation intact as staunch critic of over-​investment by China. It was this nationalistic stance that had partially led to his electoral victory. As a seasoned politician he knew too well that he did not want to be labelled as an indecisive leader, at least not immediately after an electoral victory. Secondly, being an experienced statesman in the region, he was throwing the ball into the Chinese court, possibly positioning Beijing in a defensive mode. It had been more than a decade since Mahathir left office and over the years the global politics and economics had seen dramatic changes. Mahathir needed to test the water and find out if he still had the impact he used to have. He was telling Beijing that he was in command in Putrajaya and that Beijing would have to play according to the rules both agreed.7 As was to be revealed later during the second BRI Forum, Mahathir was relatively under-​informed about the BRI (Bernama 2019). His reactions to China then were mainly driven by the way he read great power politics against his infamous analytical framework of neo-​colonialism (McGregor 2018). At this point, Mahathir’s conclusion about the BRI is given by the following: S MB = X MB  where S MB : support by Malaysia for China’s BRI X MB : benefits Malaysia accrues from the BRI


110  Farizal Mohd Razalli Whereas Najib’s administration saw the benefits from the BRI in absolute terms, Mahathir saw it in relative terms. Mahathir was critical of not only Chinese investments but foreign investments in general that, in his view, sought to manipulate Malaysia for long-​term gain. The huge purchase of land, high-​ interest loans, restrictive technology transfer, and discriminatory human capital practices were some of the key attributes Mahathir saw in Chinese investments in Malaysia. This only confirmed his fear of China’s potentially flexing its political influence over Malaysia’s domestic politics, economy, and security. Therefore, the extent to which Malaysia would enjoy the BRI’s benefits was the function of China’s interests defined, in this chapter, as a composite of geo-​strategic, geo-​economic, and geopolitical interests. We then derive the following: X MB = rCM + c 


where rCM : a composite of China’s interests linked to its BRI with respect to Malaysia c: some small unquantifiable latent costs related to accepting the BRI The “game” thus far looks daunting for Malaysia. Having inherited these signed deals, Mahathir did not seem to have much room to maneuver. His true options were either to abandon or renegotiate. There was no appetite for continuing with the deals unaltered.8 Mahathir earlier on chose to abandon by threatening to call off some mega infrastructure projects, namely the ECRL link. Nonetheless, as the new government became aware of the dire consequences of abandoning these projects through data and deeper analysis, Mahathir was convinced to opt for the second option –​to renegotiate. Nevertheless, renegotiating proved to be equally challenging for both Malaysia and China. The Chinese companies were reluctant to renegotiate on new terms. To them, those contracts signed with the previous administration were legally binding and any attempt at renegotiating them would incur violation of commitments under the contract and Malaysia would have to pay the penalty. Complicating the matter was the fact that some of these projects had already begun work, with lands already acquired. Reversing these projects would be impossible without incurring even more losses. At this point, Beijing was practically silent, signaling its reluctance to engage in what Beijing claimed to be mostly “private” business matters. Malaysia, under Mahathir’s leadership, remained steadfast about renegotiating and would not back down and continue with those projects on the current terms. Mahathir’s administration insisted on talking to Beijing lest the Chinese companies risked the projects being interrupted. Malaysia’s demands day by day had adversely affected the Chinese companies and these companies had no choice but to insist on Beijing intervening. Beijing conceded to such a request. This is an interesting turn in the “game” as Beijing’s eventual

Malaysia and China’s BRI  111 change in behavior reveals an important dynamic to the “game”. We then derive the following: rCM = ßh CM 


where C hM : Malaysia’s honoring her commitment vis-​à-​vis China; 0