Belt And Road Initiative, China’s big game
China is now the biggest investor and trading partner of 11 Middle Eastern countries, largely thanks to its Belt and Road Initiative (BRI), a multi-trillion-dollar global project.
China has significantly increased its economic, political and security footprint in the Middle East through the BRI over the past decade. The “belt” stretches from China, through South and Central Asia, and into Europe. The maritime “route” connects Chinese coastal cities to Africa and the Mediterranean.
The Center for Economics and Business Research (CEBR) said China’s Belt and Road Initiative is likely to boost the world $7.1 trillion GDP each year for the next two decades. As attractive as it sounds, in addition to economic activity, China has geopolitical motivations behind its Belt and Road Initiative.
According to The Guardian, BRI projects have left 165 countries collectively facing a huge $385 billion in China. China systematically under-reports statistics like this to international bodies, such as the World Bank.
The Chinese government information office reports that The BRI has created more than 244,000 jobs for overseas residents. However, a large majority of BRI projects require the use of Chinese companies, labor and raw materials, which means that the BRI’s GDP gains will go to Chinese “locals”, not to the people of the countries in which China has invested.
Energy Security of the People’s Republic of China
China’s major economic agencies have pointed the finger “Securityas a priority for 2022. In other words, securing supplies of everything from grain to energy and raw materials. According to the Brookings Institution, “China’s growing role in the Middle East is positioning the rising superpower in direct confrontation with evolving U.S. interests in the areas of energy security, Israel and Iran”. The US finds itself shrinking its footprint in the Middle East and focusing on the Asia-Pacific, giving China an opportunity to expand its influence in the region. China’s economic dominance could spark similar regional skirmishes, as the country seems happy to leverage risky debt against the countries it invests in to get what it wants diplomatically.
China’s relationship with the Middle East mainly revolves around energy and the BRI. Middle East and North Africa (MENA), a collective of 19 counties, has vast oil, petroleum and natural gas reserves, making it attractive to China.
According to China Global Investment Tracking, Beijing is heavily dependent on oil and gas from the Middle East. In addition to energy security, China’s strong diplomatic relations with MENA countries are key to the implementation of the BRI across multiple continents. Chinese state lenders have financed projects in Egypt, Iran, Saudi Arabia, Oman, the United Arab Emirates and Djibouti, where Beijing has established its only overseas military base.
Route of the Silk Road in China.
Djibouti, located in the “Horn of Africa”, is also home to US, French and Japanese military bases. International interest in Djibouti lies in the Strait of Bab El-Mandeb, a strategic route for oil and natural gas shipments, linking the Red Sea and the Indian Ocean. Its location makes the choke point geopolitically and economically important.
The Energy Information Administration (EIA) reports, about “6.2 million barrels per day of crude oil, condensate and refined petroleum products passed through the Bab El-Mandeb Strait to Europe, the United States and Asia. A third of the world’s ships transporting energy and goods must pass through the strait. Bab El-Mandeb is part of a series of trade and energy corridors in which China has invested, which stretch from the South China Sea to the Arabian Sea, which India calls a “string of pearls”. . India sees the investment as a sign of China’s growing military and commercial prowess in the region. Indian critics fear the BRI is a military move to give the Chinese navy greater access to the Indian Ocean.
China’s maritime “route” now stretches from western Xinjiang, through India, to the Persian Gulf. To implement the BRI, China will need to achieve energy security in the Middle East, in order to maintain its pace of development. To achieve energy security, China needs bases in every strategic port and choke point. As for the approval of China by the Gulf States, Iran announced the opening of a Chinese consulate in Bandar-Abbas, Iran’s most important commercial and military port on December 29, 2021. Beijing has maintained close ties with Iran in nuclear negotiations with the United States. Iran recently signed a 25-year cooperation agreement with China, allowing China to invest 400 billion dollars more than 25 years in Iran. Iran’s Supreme Leader Ayatollah Ali Khamenei said: “The Islamic Republic will never forget China’s cooperation during the the era of sanctions.” It is essential to bear in mind that Iran’s cooperation with China may be an uncalculated reaction to its poor relations with the United States, and not a calculated strategic decision on the part of Tehran, for its development. long term and its international trade. the economic injection that beneficiary countries like Iran will receive from China, will position China to gain favorable diplomatic preference in all developing regions through which the BRI is implemented.
Debt-trap-diplomacy or investor incompetence?
China has been accused of strategically trapping businesses with “debt trap diplomacy”. Unsustainable debt and binding conditions Chinese lending has come under increased scrutiny in recent years as more countries sign agreements with Chinese state lenders. Concerns have focused in particular on certain clauses that allow Chinese entities to seize property or assets when payments cannot be honored. This has sparked fears of seizures of land or other assets, or debts that leave governments indebted to Beijing.
MI6 chief Richard Moore has warned the BBC that China’s approach to loans often incorporates debts and data traps, which threaten “to erode sovereignty and have prompted defensive measures”. which denies them autonomous growth.
Sri Lanka is currently in a financial crisis due to debts owed to China for highways, ports, airports and a coal-fired power plant. Sri Lankan President Gotabaya Rajapaksa has asked China to consider restructuring Sri Lanka’s debt repayments. According to Reuters, over the past decade, China has lent Sri Lanka more than $5 billion. Critics say China uses low return white elephant projects, which China has denied.
Similarly, Kyrgyzstan owes 40% of its external debt, $1.8 billion, to Chinese lenders. They are grappling with refunds and meeting deadlines as the country grapples with financial issues brought on by the COVID-19 pandemic.
In Montenegro, concerns erupted after the government requested help from the European Union (EU) to repay a Chinese loan of 1 billion dollars for a controversial and ongoing highway project. Montenegro’s economy is on the verge of derailment: Montenegro’s debt has soared to 100% of its GDP because of this project. Worse, “when finished, the road will lead nowhere anyway. We make a joke: it’s ahighway from nothing to nothing“, says the country’s former justice minister, Dragan Soc. The EU’s refusal to help Montenegro pay its debt is an opportunity for China to increase its influence and presence in Europe. Scott Morris , a senior fellow at the Center for Global Development, says, “China is the world’s largest lender, so it’s important how they approach these contracts.” Morris continues, “The general conclusion after looking at the contracts is that the Chinese entities are making loans with the full intention of getting their money back.” China seems equally happy to exchanging debts for rights, ownership and influence when the prospect of financial reimbursement becomes bleak for recipients.
The policy of “non-interference”, a false sense of security
China uses a ‘Non-interference’foreign policy, to differentiate its approach from the United States, creating a false sense of security, because the very nature of the BRI is invasive. China’s “non-interference” policy, combined with the implementation of the BRI’s opaque contracts, creates opportunities for China to avoid having to take responsibility for its actions abroad, the same way as it already does at the national level.
China needs GCC approval to achieve energy security in the region. Chinese Foreign Ministry spokesperson Wang Wenbin said Gulf Cooperation Council (GCC) Secretary-General Nayef Falah Al-Hajraf expressed strong support for China’s “legitimate positions on the issues related to Taiwan, Xinjiang and human rightswhen GCC members met with Chinese officials in Beijing in early January 2022. Wang continued to say they had expressed opposition to the “politicization of human rights issues.”
The United Nations revealed in 2018 that China is detaining more than a million Muslims. Uyghurs in the Xinjiang region as part of a campaign to wipe out their culture, language and traditional beliefs. Al-Hajraf’s support for China’s detention of Uyghurs, on behalf of the GCC – a body representing more than 54 million Muslims – sets a troubling precedent for how these populations can be treated in the countries of the MENA region through which the BRI extends.
China’s “non-interference” foreign policy seems to be gaining popularity among authoritarian countries with stagnant economies; one being Iran. The 25-year Iran-China cooperation agreement is signed at a time when Iran is politically and economically isolated, which could have affected the terms of the agreement. The BRI’s track record of economically crippling projects in countries with stronger economies than Iran means Iran could have a tough 25 years ahead of it.