More than seven years after Chinese President Xi Jinping announced his country’s Belt and Road Initiative (BRI), the vast infrastructure and economic development project has emerged as “the most significant and ambitious strategic initiative of the twenty-first century so far,” according to the Center for Strategic and International Studies’ Global Infrastructure Task Force. Slated for completion in 2049, the 100th anniversary of the founding of the People’s Republic of China, the initiative is intended to link Asia to Europe via Africa and the Middle East, spurring investment and increasing global economic integration on terms largely set in Beijing.
Anticipated Chinese investments could amount to well over $1 trillion by 2027, primarily in transportation nodes such as ports and airports, as well as road, railway, and telecommunications networks, and power generation plants. Fifty special economic zones along the routes are planned as well. BRI projects have been a significant stimulant to economic activity, generating about $90 billion of associated investments as of 2019. But COVID-19 put a damper on China’s BRI investments; the first six months of 2020 saw a drop of about 50 percent from the comparable period in 2019, to $23.4 billion from $46 billion. Indeed, some analysts have argued that despite the scope of the initiative, its successes may have been overstated.
There is no doubt that the project has had its troubles, including sustainability questions, accusations of corruption, and the perception of BRI as a front for Chinese hegemony. The apparent disconnect between the scope, ambition, and undoubted successes of the Belt and Road Initiative, and its political and economic shortcomings, offer an opening for the United States. In the Middle East, this opportunity could help redefine the American role in the region even as Washington contemplates reducing its military and diplomatic footprint. Such a strategy could play an important role in the United States’ overall response to China’s assertive political and economic game, a response that is sure to be rethought by the Biden Administration.
BRI in the World: Vast Scope, Serious Questions
By 2018, China had signed up 72 countries in Asia, the Middle East, Africa, and Europe to participate in various aspects of BRI. Together, these countries represent over a third of global GDP and more than half the world’s population. Overall, 125 countries have signed some form of BRI-related agreement with China. BRI was formally incorporated into the Chinese constitution in 2017 as a sign of the initiative’s centrality to Beijing’s sense of its global destiny.
By one estimate, planned development of the initiative could drive global temperature above the critical 2 degrees Celsius level, and BRI projects alone could comprise 66 percent of global emissions by 2050.
BRI, however, has also generated its share of criticism. Accusations of corruption have dogged BRI projects every step of the way, creating anti-Beijing blowback. Environmental degradation specifically linked to global warming is another concern. By one estimate, planned development of the initiative could drive global temperature above the critical 2 degrees Celsius level, and BRI projects alone could comprise 66 percent of global emissions by 2050.
Moreover, several countries have experienced a form of “buyer’s remorse” due to their enthusiastic embrace of BRI and the assumption of debt burdens that went along with associated projects; many believe Beijing is setting this “debt trap” on purpose to take control of strategic assets. For example, after Sri Lanka defaulted on a massive Chinese loan to build a port in its southeastern city of Hambantota in 2018, China took control over the strategically located port on a 99-year lease. Indeed, the perception that China and its state-owned companies receive disproportionate benefits from BRI projects—disadvantaging local workforces, threatening sovereignty, and abetting corruption and authoritarianism in partner governments—is all too common.
Moving Forward in the Middle East
Such concerns and criticisms notwithstanding, China has moved full speed ahead to advance the key objectives of the Belt and Road Initiative (with a bit of strategic rebranding along the way). Beijing’s speed and determination has been most evident in the Middle East. China became the largest foreign investor in the region in 2016, and since BRI was inaugurated, Beijing has pumped at least $123 billion into the Middle East in BRI-related project financing. Several countries there are slated for major port and infrastructure projects, including Saudi Arabia, the United Arab Emirates, Oman, Djibouti, and Egypt. China has also signed 5G agreements with all of the Gulf Cooperation Council countries, another sign of the ever-growing economic ties to Beijing as well as the Gulf’s openness to deeper integration with China’s global development plans. Iran and China are also working closely together; in 2020, reports surfaced that the two countries were close to finalizing an enormous 25-year, $400 billion trade and security pact.
“Debt trap” and human rights concerns do not weigh very heavily on the minds of the region’s wealthy, petroleum-producing authoritarians, suggesting relatively clear sailing ahead for deeper cooperation with Beijing. Indeed, both political and economic ties between Beijing and the Gulf states in particular have grown significantly over the last few years, in line with the seemingly pragmatic and politically neutral trade, investment, and infrastructure engagement strategy laid out by the Chinese government, particularly Beijing’s “Arab Policy Paper” of 2015.
While China’s Middle East engagement strategy may be touted as benign, in fact it has gone hand in hand with the expansion of China’s military and diplomatic profile in the Middle East.
While China’s Middle East engagement strategy may be touted as benign, in fact it has gone hand in hand with the expansion of China’s military and diplomatic profile in the Middle East; BRI is seen as a key to advancing Chinese security influence in the region. According to a 2019 report by the US-China Economic and Security Review Commission, Beijing’s promotion of BRI is aimed at “increasing military cooperation and exporting its censorship and surveillance technologies to countries under BRI auspices … China’s BRI has emerged as the clearest organizing concept behind the PLA’s [People’s Liberation Army] expanding overseas presence.” The Chinese interest in expanding, creating, and securing port access along the Maritime Silk Road, especially in the Middle East, is a vital element of growing Chinese clout in a region on which it depends for 40 percent of its crude oil imports. The opening of a Chinese naval base at Djibouti in 2017 as well as the massive $50 billion BRI project at Pakistan’s port of Gwadar (a crucial part of the China-Pakistan Economic Corridor) are seen as central to facilitating China’s plans to project power in the Gulf of Aden, the Arabian Sea, and the Persian Gulf. China’s maritime ties with Israel have been expanding, too, somewhat to the consternation of the United States. In 2015, Israel signed a long-term agreement with a Chinese company to operate the Mediterranean port of Haifa, starting in 2021. The deal provoked strenuous objections from the United States centered on the potential for Chinese intelligence gathering against the US Sixth Fleet, whose vessels frequently dock in Haifa.
US Response to BRI: Too Little, but Maybe Not Too Late
Washington has appeared, at times, uncertain of what to do in response. Under President Donald Trump, the United States dropped out of the Trans-Pacific Partnership, a free trade agreement among 12 nations formed in part to counterbalance China. The United States has failed to develop any sort of “grand strategy” in its place, and Trump’s tit-for-tat trade war with Beijing has, if anything, disadvantaged American producers, particularly in the agricultural sector, while prompting erstwhile allies to expandtheir own economic relations with China.
In 2020, the United States announced a somewhat belated package of initiatives of its own to provide counterpoint to BRI’s expansion. These include the Blue Dot Network to establish “shared standards for global infrastructure development”—an effort to prevent China from unilaterally setting global infrastructure standards—and a project supported by the new US International Development Finance Corporation (DFC) to work with Trans Pacific Networks to help construct the longest undersea telecommunications cable in the world to bridge the Indo-Pacific region. These projects are part of a broader US “Indo-Pacific Economic Vision,” announced in 2018 as an answer to BRI. The partnership initially provided $113 million in direct US government investment and doubled the worldwide spending limit for the DFC (the successor to the US Overseas Private Investment Corporation, or OPIC) to $60 billion, which could be used to loan money to companies for overseas projects.
Washington’s limited policy responses have focused almost exclusively on the Indo-Pacific region; the United States has said next to nothing about the impact of BRI and expanding Chinese ties in the Middle East.
However, such efforts fall far short of Beijing’s own financial and political investment in BRI. In addition, Washington’s limited policy responses have focused almost exclusively on the Indo-Pacific region; the United States has said next to nothing about the impact of BRI and expanding Chinese ties in the Middle East, including the ramifications for the political-military balance in the region.
This is a mistake for two reasons. The first is that Chinese gains are coming at the expense of the perceived loss of American influence, a perception which, though overrated, can turn into reality if left unchecked. The second is that the United States may be missing an opportunity to enhance its position in the region at China’s expense.
Now is a good time for a rethink by American decision-makers.
Options for the United States
Just as China has largely taken a free ride on the costly and painstakingly constructed US security architecture in the Middle East, the United States might consider how to leverage the Chinese-financed BRI to its own advantage. As Washington contemplates drawing down, or at least rebalancing, its security posture in the region, it should consider how to approach BRI in a way that enhances the US economic and political position and circumscribes the threat that BRI potentially poses to the American regional sphere of influence.
First of all, Washington needs to include the Middle East in its strategic thinking about BRI rather than approaching it primarily as a challenge in the Indo-Pacific region. The United States should extend programs intended to encourage regional economic integration into the Middle East—particularly the Blue Dot Network which, by addressing the sustainability of Chinese project development and setting standards for new infrastructure, could help advantage US companies that seek a share of BRI-related projects. The United States could also offer project financing to American companies that want to compete on a level playing field with Chinese firms, particularly those whose activities will utilize infrastructure that is already financed and developed by Chinese companies. Giving advantage to American companies that seek to participate in BRI-related activity should be a priority of all US embassies in the region. And there is money to be made: one report suggests that even if US-China trade tensions are factored in, BRI projects could boost US GDP by 1.4 percent by 2040, largely owing to gains in that global trade that BRI development is expected to generate. Opportunities in the Middle East will play an important role in realizing such gains.
The United States should leverage the vital security umbrella it provides to key allies in the Middle East—notably in the Gulf—to ensure Washington has a say in the development of BRI infrastructure in the region.
Second, the United States should leverage the vital security umbrella it provides to key allies in the Middle East—notably in the Gulf—to ensure Washington has a say in the development of BRI infrastructure in the region. Given the security and intelligence implications of China’s BRI projects, the United States has a legitimate case for an oversight role, particularly where such projects are in close proximity to US military facilities or assets. Rather than insist that China share more of the security burden to help protect its access to Middle East petroleum, the United States can exploit the dependence of both China and regional states on the American security presence to insist that Washington’s security, diplomatic, and economic interests are advanced, not threatened, by BRI.
Third, Washington should highlight the many missteps of the BRI in terms of project sustainability, the limited benefits accruing to local workforces, and especially corruption, factors that directly harm citizens of BRI-participating countries. Corruption, in particular, has provoked significant anger in many countries of the region, inasmuch as it affects everything from daily life to national governance to human rights. President-elect Joe Biden, who has promised to make the fight against corruption a hallmark of his foreign policy, should focus attention on this issue to raise the costs to China of pursuing BRI in the Middle East and elsewhere without regard to the rule of law and human rights. This would also help bolster Biden’s assurances that, unlike Trump, he will no longer coddle the region’s autocrats on human rights issues.
By taking a smarter approach to the advance of China and its Belt and Road Initiative, the Biden Administration could help put the ineffectual fuming that characterized so much of the Trump Administration’s foreign policy in the rearview mirror. Biden could simultaneously signal a new era for American diplomacy and help turn a major building block of China’s global strategy to US advantage, especially in the Middle East.
*Photo credit: China Daily