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HomeIn-Depth AnalysisChina’s Belt and Road Initiative: Ambitious Enterprise but Not a Menace to North Atlantic Interests

China’s Belt and Road Initiative: Ambitious Enterprise but Not a Menace to North Atlantic Interests

Image Credit: Moign Khawaja

By Christopher Mott

Key Takeaways 

  • The Belt and Road Initiative (BRI) is a Chinese state-directed investment and infrastructure development project primarily targeting developing nations in and around the Eurasian supercontinent across two axes, an inland Eurasian ‘belt’ and a maritime ‘road’ connecting the Indo-Pacific to Africa.
  • The BRI is not destined to be detrimental to the geopolitical position of North Atlantic powers (viz., U.S., U.K., and Canada) and, by better connecting remote disconnected regions to the global economy, may indirectly raise North Atlantic’s diplomatic leverage in these regions over the long term.
  • There is no guarantee the BRI will succeed, and its pursuit could simply amount to China wasting a large amount of money in fruitless pursuits. Nevertheless, if the project does succeed, it could help increase trade opportunities for the target countries with all international markets, not just China’s.
  • BRI projects could aid efforts to combat extremism in certain unstable regions of the world by bringing the benefits of globalization and increasing development and employment opportunities. This includes bolstering local counter-terrorism options across these regions so as to preclude the need for NATO like in Afghanistan.
  • Rather than decreasing the autonomy of target countries vis-à-vis Beijing, as commonly assumed, BRI projects could provide these states and their populations with resources (such as modern internet and telecommunications infrastructure) to increase their autonomy, facilitating the creation of various regional blocs made up of several small powers. 

The Strategic Goals of the BRI and Its Reception in the West 

The BRI is the Chinese government’s ambitious and international infrastructure development project whose goal is to greatly expand trade and logistical capacity across numerous partner nations. Many of the targeted nations are peripheral to major global trade networks and are often overlooked when it comes to foreign direct investment (FDI). As a continental power, Beijing’s plan is to not only increase the viability of these nations as trade partners, but also to compete with the maritime powers for influence.

The BRI’s investment and development plan aims to expand trade and logistical capacity with the potential to expand the project to over 130 nations. It specifically targets an inland-Eurasia-focused grouping of ‘one belt economies’ (initially) through developing miles of ambitious highways and railroads that will eventually connect Mongolia, Russia, the former Soviet Republics in Central Asia, the Caucasus, Turkey, and most recently Iran as well as a variety of Central, Eastern, and Southern European states. Additionally, the BRI seeks to reestablish the historical Indian Ocean trade networks of maritime commerce by linking via strategic ports and hubs the so-called ‘one road economies’ that roughly correspond to the developing coastal nations in Southeast Asia, the Indian Ocean, and East and West Africa, 

Railroads and highways are the initial focus of the first axis, and ports the second. The goals are cast as policy coordination efforts among participant governments, communication facilitation on macro-issues related to commerce between the signatories, facilities’ connectivity via standardized infrastructure, integration of finance mechanisms among nations, and a general reduction of trade barriers and excess customs procedures whenever possible

The total cost of this undertaking to China is estimated to reach between $4 and $8 trillion dollars by the projected completion of the project in 2049, with $900 billion in annual investment required to meet targets. These numbers would stress the Chinese economy, and so far the project has fallen short of proposed funding levels. By 2017, China had invested $340bn. If that rate continued, the target goal of $1trn by 2025 could be realized. If increased, state spending on the project could reach $2trn by 2030

North Atlantic strategists fear the potential of this project to redirect trade and influence away from their ports and traditional avenues, believing that as China gains control over smaller nations, it will establish itself as the world’s dominant trade nexus. Multiple think tanks and commentators have raised concerns about how the Chinese might assert economic control over much of the planet and exclude the other countries from entire regions

These concerns distract from the immense opportunity to the North Atlantic world that is unfolding in real time. The BRI poses no real threat to the supposedly excluded countries that have the foresight to take advantage of new opportunities. The possibility now exists to not only increase trade with regions beyond the scope of normal focus for countries like the U.S., Canada, and the U.K., but also to affirm the sovereignty of smaller countries by welcoming the chance for them to become more competitive on the world stage. Already, the arrival of the BRI has prompted some countries to increase their own alternative investments in regional infrastructure to compete with Beijing. 

Potential Benefits for BRI Partner Nations

The BRI may well reduce trade costs by streamlining infrastructure standards and customs regimes among its partner countries while reducing trade barriers. Given that the Chinese made massive economic gains under US-backed trade policies from the end of the Cold War onwards, the BRI could allow its partner nations to do the same by piggybacking on Beijing’s programs. Rendering pre-existing trends more efficient at generating commerce could open opportunities for all actors doing business in the region, not just the initial investor.

One particular of concern often raised by North Atlantic commentators is the potential for China’s highly monitored and tightly regulated internet to expand into these countries as part of Beijing’s Digital Silk Road initiative. It is important to note, however, that such digital and cyber partnerships are often motivated less by ideology than they are by circumstantial and pragmatic considerations that drive decision-making for many developing countries. After all, many of the countries in BRI partnerships are already repressive toward their citizens without a well-developed cyber infrastructure. In the long run and once an advanced internet infrastructure network is established, it is more likely that, rather than acquiescing to Beijing, Digital Silk Road participating nations will use their enhanced security capacities to strengthen their own power in their own country at China’s expense. If a government decides to pursue a more independent path towards Beijing, an advanced internet capability, such as fifth-generation technology (5G), could provide such a state with more options allowing it to better diversify its security relationships. 

Moreover, the growth of 5G networks in developing countries vastly improves the connectivity of their citizens to the greater world, better integrating both that market and its people with the global economy and opening the local economy to partake in the benefits of international trade and modern technology. Thus, no matter which state, if any, wields digital power in various localities of the “Digital Silk Road”, the continual development of this infrastructure will nevertheless increase business opportunities for all who wish to expand commercial ties with the host country, no matter which country they originate from.

Development can also help make states more governable and responsible to their citizens. The absence of economic opportunity enhances the appeal of extremist groups in the poorer regions of the world. Expanding and improving infrastructure in regions where extremist non-state actors operate is no panacea, but it can help limit their appeal. In Central Asia, for example, Kazakhstan’s successful post-Soviet development has enhanced its internal stability, while its neighbor Uzbekistan – which has struggled to develop – hosts Central Asia’s largest jihadist recruitment drive

The potential benefits of increased development throughout Eurasia also increases the capacity for local states to combat terrorism on their own terms, which decreases the odds of further afield countries having to become trapped in military operations in regions far removed from their core national interests. What is more, BRI projects will inevitably produce more regional integration with neighboring countries having a much higher stakes in stability and preserving the integrity of the region’s infrastructure networks. In the case of America’s longest running war in Afghanistan for instance, powerful neighboring countries (from China and Russia to Iran and Pakistan) will have an even greater interest in preventing state failure in that country, which could escalate into transnational insecurity and disorder and thus do lasting damage to these nations’ investments toward infrastructure and trade.

Just as foreign development assistance helped countries such as Egypt, Yugoslavia, and some non-aligned countries bolster their independence during the Cold War, the BRI could also solidify the economic and political sovereignty of beneficiary states. Increased levels of development fueled through infrastructure and trade can enable smaller countries to attract investment from multiple competing powers, in turn increasing their ability to shop around for better deals and lessen their dependence on a single source. Already, Japan has begun to compete with China on projects in countries signed up to the BRI program by offering alternative and competitive investments in infrastructure.

Countries recovering from conflict, such as Pakistan and Tajikistan, tend to be dependent on larger patrons. Pakistan’s internal fragility, for instance, causes it to lean heavily on Chinese support, especially for defense. But should it become a more important conduit of international trade from Central Asia through its newly upgraded and integrated ports on the Indian Ocean, it would be better able to diversify its sources of foreign assistance. Tajikistan is the least developed nation in Central Asia, and since the Tajik Civil War, Russia has maintained a large and influential military presence in the country. Tajikistan is also incredibly rich in hydropower, of which it is a net exporter. The BRI-driven expansion in pan-regional infrastructure could increase Tajikistan’s trading options and decrease its dependence on Moscow. Other countries with significant interests in the Indian Ocean could also benefit. As part of the BRI, China has taken out a 99-year lease on a new port in Hambantota, Sri Lanka, and undertaken its development. While this venture might seem, at first, to be illustrative of Chinese economic predation—whereby Sri Lanka becomes more dependent on Chinese investment and subservient to its interests—in practice, the deal has alerted Japan and India to the need to invest in Sri Lanka to prevent China from gaining too much strategic traction there thus encouraging competition.

In any case, evidence that the BRI is winning China massive goodwill in beneficiary countries is inconclusive. China often stipulates that its own companies and laborer’s must get many of the jobs created by BRI-related projects, which generates some resentment. So far, the BRI’s largest effect in Central Asia appears to be to encourage public discussion on the tolerable amount of Chinese influence. China can help build infrastructure and stimulate growth and prosperity, but it is not necessarily buying long-term leverage that would exclude other powers from competing with Beijing to exert their own diplomatic weight.

Wider Geopolitical Implications of the BRI

NATO countries do not have much to offer many BRI-partnered nations. Many of these countries are located far away or on the fringes of the Atlantic world and their distance diminishes their immediate strategic importance for North Atlantic powers while making the cost/benefit burden of direct involvement less attractive. Although the potential benefits to Beijing are real, the BRI carries enormous financial risk in the form of publicly guaranteed debt. This will be the major source of funding for many countries on the BRI priority list. According to the World Bank, almost two-thirds of the countries affected by the BRI have elevated debt vulnerabilities, and over one-third are in danger of or in debt distress. Many projects will not work out or pay off for China, likely undermining smaller nations’ relationships with Beijing. The likelihood of such uneven results suggests that China may struggle to transform its BRI investments into hegemonic reach, or will have to peddle influence in a way that involves compromising with local actors to a far greater degree than was originally foreseen. 

The BRI may also lead to private investment in places previously regarded as economic backwaters. The massive expansion of infrastructure during the Cold War in places like Singapore, Malaysia, and the Persian Gulf states greatly increased the international prominence of those countries. Owing money to China also gives smaller powers some situational leverage with Beijing as they navigate a newly competitive investment market domestically. At the same time, China’s political compulsion to keep projects profitable significantly limits its financial options, as does its incentive to buoy the ability of the host country to raise investment elsewhere to ease the financial burden on Beijing. 

While no reprise of the Sino-Soviet split of the 1960s is likely now, the BRI could in time increase rather than decrease Sino-Russian rivalry. Russia has strong defense ties with India, which is skeptical about the BRI but a potential beneficiary of its trade promotion. Dating back to Indian independence, the Soviet Union and now Russia has been a reliable arms supplier to the Indian state. Since the 1962 Sino-Indian Border Conflict through today’s Himalayan border disputes, Beijing and New Delhi have had a troubled and often turbulent relationship. The border clashes of 2020 show this has not diminished as a factor in the bilateral relations between the two countries. Customary cooperation between Pakistan and China is a constant concern for India. For geopolitical reasons, Russia remains compelled to balance between India and China, and the expansion of the BRI will not change this dynamic. In this light, it seems premature to anticipate that the BRI will lock in a permanent and robust Sino-Russian alliance

Alternatively, open interference by outside actors seeking to undermine the BRI could be perceived as hostile and might alienate smaller nations and drive them closer to China. Led by the United States, North Atlantic powers have little influence or interest in many of the countries signing on to become partners with Beijing. Development of these regions, especially given the dearth of realistic or viable alternatives to the BRI, could even deliver benefits to the North Atlantic such as easing the burdens of global counter-terrorism operations or expanding the long-term sovereignty of smaller nations along the Chinese periphery.

Adopting a policy of restraint toward BRI by the North Atlantic governments in Washington, Ottawa, and London should not discourage Western firms from pursuing attractive investment opportunities in BRI countries. In fact, this could be the win-win scenario: BRI projects provide such non-local companies with better access and infrastructure in faraway lands, and, owing to the private nature of such transactions and the greater distance of the West from BRI nations compared to China, smaller nations would likely welcome private investments from the North Atlantic as a means to balance the reach of China and its state-directed enterprises.

Conclusion

The BRI is an example of a larger phenomenon: as states get richer, they tend to invest more heavily abroad in ways that advance their interests. But as the junior partners in such arrangements receive more funds, they are better able to act autonomously when it comes to competitive diplomacy. This means that policymakers in places like Washington, Ottawa, and London would be wise to expand trade relationships and be more sparing in deploying sanctions that could drive away potential partners. Confident and secure nations should not enter bidding wars for influence in regions with little strategic return on investment.

The BRI could bring a variety of outcomes to the smaller Eurasian states, none of which substantially endangers US security. Greater levels of development may increase trade to the region and reduce violent extremism. They probably will not seriously compromise the sovereignty of the smaller participant states and may even help some strengthen their regional negotiating positions by playing China off against other potential patrons.

The general principle stands that China’s development of international trade links and relationships is not an automatic zero-sum loss for other nations that wish to capitalize on international trade. Chinese investment does not preclude investment by private companies, and the more patrons a smaller country has, the less likely it is to be bought out by a single foreign nation. International competition from multiple vectors increases the odds of a smaller developing nation further empowering its sovereignty, and thus overall security, and leveraging its position in a multi-polar system.

The geographical distance of North Atlantic states from inland Eurasian states means that these countries are likely to view this bloc as a less threatening counter-balancing partner than China. North Atlantic policymakers should not squander this advantage by taking a confrontational or obstructionist approach to the international infrastructure projects of other powers. An overwrought reaction to the BRI by the U.S. and her allies would only transform it from a non-threatening opportunity for greater regional integration and collective responsibility into yet another trigger for potential escalation and conflict—this time among great powers.  

Note: The author previously published a similar argument with a specifically U.S. grand strategy focus in the July 2020 issue of Survival: Global Politics and Strategy.

Dr. Christopher Mott is a Research Fellow at the Institute for Peace & Diplomacy.

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Panel 4: Pathways to Manage Non-Proliferation in the Middle East (4:30 PM - 5:45 PM ET)

The Western powers have failed to effectively manage the increasing threat of proliferation in the Middle East. While the international community is concerned with Iran’s nuclear program, Saudi Arabia has moved forward with developing its own nuclear program, and independent studies show that Israel has longed possessed dozens of nuclear warheads. The former is a member of the treaty on the Non-Proliferation of Nuclear Weapons (NPT), while the latter has refused to sign the international agreement. 

On Middle East policy, the Biden campaign had staunchly criticized the Trump administration’s unilateral withdrawal from the Joint Comprehensive Plan of Action (JCPOA), more commonly known as the Iran Nuclear Deal and it has begun re-engaging Iran on the nuclear dossier since assuming office in January 2021. However, serious obstacles remain for responsible actors in expanding non-proliferation efforts toward a nuclear-free zone in the Middle East. 

This panel will discuss how Western powers and multilateral institutions, such as the IAEA, can play a more effective role in managing non-proliferation efforts in the Middle East.  

Panelists:

Peggy Mason: Canada’s former Ambassador to the UN for Disarmament

Mark Fitzpatrick: Associate Fellow & Former Executive Director, International Institute for Strategic Studies (IISS)

Ali Vaez: Iran Project Director, International Crisis Group

Negar Mortazavi: Journalist and Political Analyst, Host of Iran Podcast

David Albright: Founder and President of the Institute for Science and International Security

 

Closing (5:45 PM – 6:00 PM ET)

Panel 3: Trade and Business Diplomacy in the Middle East (3:00 PM - 4:15 PM ET)

What is the current economic landscape in the Middle East? While global foreign direct investment is expected to fall drastically in the post-COVID era, the World Bank reported a 5% contraction in the economic output of the Middle East and North African (MENA) countries in 2020 due to the pandemic. While oil prices are expected to rebound with normalization in demand, political instability, regional and geopolitical tensions, domestic corruption, and a volatile regulatory and legal environment all threaten economic recovery in the Middle East. What is the prospect for economic growth and development in the region post-pandemic, and how could MENA nations promote sustainable growth and regional trade moving forward?

At the same time, Middle Eastern diaspora communities have become financially successful and can help promote trade between North America and the region. In this respect, the diaspora can become vital intermediaries for advancing U.S. and Canada’s business interests abroad. Promoting business diplomacy can both benefit the MENA region and be an effective and positive way to advance engagement and achieve foreign policy goals of the North Atlantic.

This panel will investigate the trade and investment opportunities in the Middle East, discuss how facilitating economic engagement with the region can benefit Canadian and American national interests, and explore relevant policy prescriptions.

Panelists:

Hon. Sergio Marchi: Canada’s Former Minister of International Trade

Scott Jolliffe: Chairperson, Canada Arab Business Council

Esfandyar Batmanghelidj: Founder and Publisher of Bourse & Bazaar

Nizar Ghanem: Director of Research and Co-founder at Triangle

Nicki Siamaki: Researcher at Control Risks

Panel 2: Arms Race and Terrorism in the Middle East (12:00 PM - 1:15 PM ET)

The Middle East continues to grapple with violence and instability, particularly in Yemen, Syria and Iraq. Fueled by government incompetence and foreign interventions, terrorist insurgencies have imposed severe humanitarian and economic costs on the region. Meanwhile, regional actors have engaged in an unprecedented pursuit of arms accumulation. Saudi Arabia and the United Arab Emirates have imported billions of both Western and Russian-made weapons and funded militant groups across the region, intending to contain their regional adversaries, particularly Iran. Tehran has also provided sophisticated weaponry to various militia groups across the region to strengthen its geopolitical position against Saudi Arabia, UAE, and Israel. 

On the other hand, with international terrorist networks and intense regional rivalry in the Middle East, it is impractical to discuss peace and security without addressing terrorism and the arms race in the region. This panel will primarily discuss the implications of the ongoing arms race in the region and the role of Western powers and multilateral organizations in facilitating trust-building security arrangements among regional stakeholders to limit the proliferation of arms across the Middle East.

 

Panelists:

Luciano Zaccara: Assistant Professor, Qatar University

Dania Thafer: Executive Director, Gulf International Forum

Kayhan Barzegar: Professor and Chair of the Department of Political Science and International Relations at the Science and Research Branch of Azad University

Barbara Slavin: Director of Iran Initiative, Atlantic Council

Sanam Shantyaei: Senior Journalist at France24 & host of Middle East Matters

Panel 1: Future of Diplomacy and Engagement in the Middle East (10:30 AM-11:45 AM ET)

The emerging regional order in West Asia will have wide-ranging implications for global security. The Biden administration has begun re-engaging Iran on the nuclear dossier, an initiative staunchly opposed by Israel, while also taking a harder line on Saudi Arabia’s intervention in Yemen. Meanwhile, key regional actors, including Qatar, Iraq, and Oman, have engaged in backchannel efforts to bring Iran and Saudi Arabia to the negotiating table. From a broader geopolitical perspective, with the need to secure its energy imports, China is also expected to increase its footprint in the region and influence the mentioned challenges. 

In this evolving landscape, Western powers will be compelled to redefine their strategic priorities and adjust their policies with the new realities in the region. In this panel, we will discuss how the West, including the United States and its allies, can utilize multilateral diplomacy with its adversaries to prevent military escalation in the region. Most importantly, the panel will discuss if a multilateral security dialogue in the Persian Gulf region, proposed by some regional actors, can help reduce tensions among regional foes and produce sustainable peace and development for the region. 

Panelists:

Abdullah Baabood: Academic Researcher and Former Director of the Centre for Gulf Studies, Qatar University

Trita Parsi: Executive Vice-President, Quincy Institute for Responsible Statecraft

Ebtesam Al-Ketbi: President, Emirates Policy Centre​

Jon Allen: Canada’s Former Ambassador to Israel

Elizabeth Hagedorn: Washington correspondent for Al-Monitor

Panel 4: Humanitarian Diplomacy: An Underused Foreign Policy Tool in the Middle East (4:30 PM - 5:30 PM ET)

Military interventions, political and economic instabilities, and civil unrest in the Middle East have led to a global refugee crisis with an increasing wave of refugees and asylum seekers to Europe and Canada. Moreover, the COVID-19 pandemic has, in myriad ways, exacerbated and contributed to the ongoing security threats and destabilization of the region.

While these challenges pose serious risks to Canadian security, Ottawa will also have the opportunity to limit such risks and prevent a spillover effect vis-à-vis effective humanitarian initiatives in the region. In this panel, we will primarily investigate Canada’s Middle East Strategy’s degree of success in providing humanitarian aid to the region. Secondly, the panel will discuss what programs and initiatives Canada can introduce to further build on the renewed strategy. and more specifically, how Canada can utilize its policy instruments to more effectively deal with the increasing influx of refugees from the Middle East. 

 

Panelists:

Erica Di Ruggiero: Director of Centre for Global Health, University of Toronto

Reyhana Patel: Head of Communications & Government Relations, Islamic Relief Canada

Amir Barmaki: Former Head of UN OCHA in Iran

Catherine Gribbin: Senior Legal Advisor for International and Humanitarian Law, Canadian Red Cross

Panel 3: A Review of Canada’s Middle East Engagement and Defense Strategy (3:00 PM - 4:15 PM ET)

In 2016, Canada launched an ambitious five-year “Middle East Engagement Strategy” (2016-2021), committing to investing CA$3.5 billion over five years to help establish the necessary conditions for security and stability, alleviate human suffering and enable stabilization programs in the region. In the latest development, during the meeting of the Global Coalition against ISIS, Minister of Foreign Affairs Marc Garneau announced more than $43.6 million in Peace and Stabilization Operations Program funding for 11 projects in Syria and Iraq.

With Canada’s Middle East Engagement Strategy expiring this year, it is time to examine and evaluate this massive investment in the Middle East region in the past five years. More importantly, the panel will discuss a principled and strategic roadmap for the future of Canada’s short-term and long-term engagement in the Middle East.

Panelists:

Ferry de Kerckhove: Canada’s Former Ambassador to Egypt

Dennis Horak: Canada’s Former Ambassador to Saudi Arabia

Chris Kilford: Former Canadian Defence Attaché in Turkey, member of the national board of the Canadian International Council (CIC)

David Dewitt: University Professor Emeritus, York University

Panel 2: The Great Power Competition in the Middle East (12:00 PM - 1:15 PM ET)

While the United States continues to pull back from certain regional conflicts, reflected by the Biden administration’s decision to halt American backing for Saudi Arabia’s intervention in Yemen and the expected withdrawal from Afghanistan, US troops continue to be stationed across the region. Meanwhile, Russia and China have significantly maintained and even expanded their regional activities. On one hand, the Kremlin has maintained its military presence in Syria, and on the other hand, China has signed an unprecedented 25-year strategic agreement with Iran.

As the global power structure continues to shift, it is essential to analyze the future of the US regional presence under the Biden administration, explore the emerging global rivalry with Russia and China, and at last, investigate the implications of such competition for peace and security in the Middle East.

Panelists:

Dmitri Trenin: Director of Carnegie Moscow Center

Joost R. Hiltermann: Director of MENA Programme, International Crisis Group

Roxane Farmanfarmaian: Affiliated Lecturer in International Relations of the Middle East and North Africa, University of Cambridge

Andrew A. Michta: Dean of the College of International and Security Studies at Marshall Center

Kelley Vlahos: Senior Advisor, Quincy Institute

Panel 1: A New Middle East Security Architecture in the Making (10:30 AM -11:45 AM ET)

The security architecture of the Middle East has undergone rapid transformations in an exceptionally short period. Notable developments include the United States gradual withdrawal from the region, rapprochement between Israel and some GCC states through the Abraham Accords and the rise of Chinese and Russian regional engagement.

With these new trends in the Middle East, it is timely to investigate the security implications of the Biden administration’s Middle East policy. In this respect, we will discuss the Biden team’s new approach vis-à-vis Iran, Yemen, Saudi Arabia, and Israel. The panel will also discuss the role of other major powers, including China and Russia in shaping this new security environment in the region, and how the Biden administration will respond to these powers’ increasing regional presence.

 

Panelists:

Sanam Vakil: Deputy Director of MENA Programme at Chatham House

Denise Natali: Acting Director, Institute for National Strategic Studies & Director of the Center for Strategic Research, National Defense University

Hassan Ahmadian: Professor of the Middle East and North Africa Studies, University of Tehran

Abdulaziz Sagar: Chairman, Gulf Research Center

Andrew Parasiliti: President, Al-Monitor