Tue, Nov 06, 2018 - Page 9 News List

Reconsidering China’s Belt and Road Initiative

Chinese President Xi Jinping’s plan to link economies through massive infrastructure projects is not about to collapse or be abandoned, but Beijing needs to take another look, otherwise there is a risk that the plan could undermine its intended outcomes

By Nisid Hajari  /  Bloomberg Opinion

Illustration: Yusha

As a line on a map, Malaysia’s East Coast Rail Link makes sense. Slashing diagonally across the peninsula from Port Klang at one end to the port of Kuantan and towns north at the other, the project looks well-situated to encourage travel and commerce, and to spread prosperity from the country’s rich west to its poorer east.

Connecting its dotted line to others spreading outward from China to the Middle East, Africa and Europe only strengthens the case. As a critical link in China’s “trillion-dollar” global infrastructure scheme, the so-called Belt and Road Initiative, it would enable oil and other commodities to flow from the Middle East to China without making the age-old journey by ship through the narrow and easily blockaded Strait of Malacca. Seen this way, the project seems not just a solid investment, but also a stroke of strategic genius.

Reality is more sobering. The project’s original US$13 billion price tag was already eye-wateringly high. After returning to power this spring, Malaysian Prime Minister Mahathir Mohamad estimated the total would run closer to US$20 billion. Would it be worth the price? Some residents of Kuala Lumpur might welcome a speedier route to the white-sand beaches of Malaysia’s east coast, but it is difficult to see why shipping companies would: They would pay more and save barely 30 hours if they unloaded their cargo at one end of the line, filed the requisite paperwork, sent containers trundling across the country and then reloaded them on a different ship at the other end. Barring war with the US, even Chinese shippers would be unlikely to make the effort.

Mahathir suspended work on the rail line and canceled three Chinese-linked pipeline projects outright. He has undercut a multibillion-dollar condo development by warning potential Chinese buyers that they should not expect visas to live in Malaysia. Prospects for a Chinese-funded port complex at Malacca, which analysts say would struggle to draw business away from Singapore — bigger and more efficient — look shaky as well.

Skepticism about the Belt and Road Initiative is spreading well beyond Malaysia. Nearby Myanmar has dramatically scaled back its own Chinese-funded port. Thailand has rejected Chinese financing for rail projects across the country. Even loyal ally Pakistan, which faces a current-account crisis in part because of all the money spent on importing Chinese equipment to build the US$62 billion China-Pakistan Economic Corridor, has talked about reassessing the scope and character of the scheme.

Five years after Chinese President Xi Jinping (習近平) announced plans for a land-based “Silk Road Economic Belt” and sea-based “21st Century Maritime Silk Road,” the program still has plenty of boosters — especially in the pages of China’s state-run press. It is not about to collapse or be abandoned, but Xi and the rest of the Chinese leadership have good reason to take another look, otherwise there is a risk that this plan to project Chinese power, influence and trade across much of the world could undermine all three.

Xi did not invent the idea of using Chinese money and expertise to build infrastructure overseas. Many projects now encompassed by the Belt and Road Initiative were launched long before the scheme was conceived. What he did in 2013 was fit those efforts into a larger narrative.

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