On the same day Donald Trump and Xi Jinping struck a trade-war truce in Argentina, some 11,000 kilometers away Canadian authorities made an arrest on suspicion of violating US sanctions on Iran. Conversely, a Chinese court order instructed Apple to stop sales of its iPhones, which observers believe was a cautionary signal to Washington.
All these escalations threaten to make the US-China conflict much worse. This latest development highlights the fact that fundamental disagreements between the US and China are intensifying fast and furious. Indeed, Beijing and Washington face geopolitical fissures that may persist in the coming decades.
Such disagreements have become increasingly evident since 2013 when Xi launched his trillion-dollar Belt and Road Initiative to dominate Eurasia and thereby the world beyond. Donald Trump’s White House, in turn, is wielding tariffs along with its Indo-Pacific Strategy as weapons to try to beat recalcitrant allies back into line and cripple the mammoth BRI.
However different these approaches may seem, they share one strikingly similar feature: a reliance on the concept of “geopolitics” to guide their bids for global power.
At the end of the 19th century, an American naval historian argued that sea power was the key to national security and international influence. A decade later, a British geographer observed that railroads had shifted the locus of global power landward into the interior of the vast Eurasian continent.
In the succeeding century, a succession of scholars would draw on these two basic ideas to inspire bold geopolitical gambits by Nazi Germany, by Cold War Washington, and more successfully by China’s mega-project Belt and Road Initiative, which primarily focuses on all forms of physical infrastructure (road, airport, maritime and energy).
China envisages a vast global network of trade, investment and infrastructure that will reshape financial and geopolitical ties – and bring the rest of the world closer to Beijing. Since its inception, the BRI has financed infrastructure projects in 112 countries. It is a modern-day version of the Marshall Plan, America’s reconstruction effort after World War II, which created a foundation for enduring military and diplomatic alliances. China’s strategy is bolder, more expensive and far riskier.
In the West, it is feared that the BRI is an extension of efforts by the Communist Party of China (CPC) to undermine the security and economic architecture of the international order. China’s growing largesse, Western countries worry, comes largely at the expense of international institutions and American influence.
As the BRI is only five years old (and many of its main members have been involved for a far shorter time), its full results cannot yet be judged. However, a preliminary assessment can be offered for BRI projects in South and Southeast Asia, the region described by Chinese leaders as the “main axis” of the project. Large ports in Pakistan, Sri Lanka and Myanmar – three countries along a major oil and commerce route from the Middle East and Africa – could someday double as naval logistics hubs. These three BRI countries play key roles in achieving China’s core geopolitical strategic goal called the “String of Pearls.”
That term as a geopolitical concept was first used in an internal US Department of Defense report titled “Energy Futures in Asia.” The term is also widely used in India’s geopolitical and foreign-policy narratives to highlight its concerns over massive BRI projects across southern Asia.
Through this geopolitical strategy, Beijing aims to build a network for Chinese military and commercial facilities and relationships along with its sea lines of communication, which extend from the Chinese mainland to Port Sudan. The sea lines run through several major maritime chokepoints such as the Bab-el-Mandeb strait, the Strait of Malacca, the Strait of Hormuz, and the Lombok Strait as well as other strategic maritime centers in Pakistan, Sri Lanka, Bangladesh, Maldives and Somalia.
All these straits, countries and chokepoints are crucial for international energy and trade supply lanes, which makes them of interest to the US Navy. Consequently, the Chinese military presence in these regions will undoubtedly escalate tensions that could turn into an unexpected incident, as has already occurred in the South China Sea.
A 2016 report by the Center for Strategic and International Studies judged that none of the Indian Ocean port projects funded through the BRI have much hope of financial success. They were likely prioritized for their geopolitical utility. Projects less clearly connected to China’s security needs have more difficulty getting off the ground: the research firm RWR Advisory Group notes that 270 BRI infrastructure projects in the region (or 32% of the total value of the whole initiative) have been put on hold because of problems with practicality or financial viability. There is a vast gap between what the Chinese have declared they will spend and what they have actually spent.
In addition, prolonged exposure to the BRI process has driven opposition to Chinese investment and geopolitical influence across the region. In Maldives, the pro-Beijing Progressive Party of Maldives was unseated last year by the Maldivian Democratic Party, which ran on an explicitly anti-BRI platform. Maldives’ new president, Ibrahim Mohamed Solih, calls the BRI “a big cheat” and a “debt trap” that must be abandoned or renegotiated.
Beijing is heavily focused on its neighbors, lending them money for extensive road-building projects. Pakistan is running out of money to repay the loans, part of a broader pattern of what critics call China’s “debt trap” diplomacy. The New York Times examined nearly 600 projects that China helped finance in the past decade, through billions of dollars in grants, loans and investments. Taken together, they show the scope and motivation of China’s strategy.
The China-Pakistan Economic Corridor (CPEC) is a classic example of China’s aggressive geopolitical outreach through its Belt and Road Initiative, aptly analyzed by the conservative National Review:
“The heart of the BRI is debt-trap diplomacy: China oversells the benefits of these infrastructure projects, offers credit for them on onerous terms, and when the bill comes due and its debtors aren’t able to pay, demands control over the infrastructure and influence in the region to compensate. The attempt to turn these countries into satellite states via the strategic construction of infrastructure is pure geopolitics. China has eyed a westward turn for years, and its desire to advance in Southeast Asia is no secret.”
Elsewhere in the Pacific the democratic Quad – Australia, India, Japan, and the US – and several European countries have begun to signal major reservations about the BRI.
Jeff Smith, a research fellow at the Heritage Foundation, says in an article, “Chinese investments in sensitive infrastructure and the outgrowth of Chinese ‘sharp power’ and the ways it is using its economic influence as an extension of its foreign policy to punish, coerce, or incentivize regional states to align with its agenda.”
Now, America and its partners have begun exploring how best to cope with the consequences of the BRI, offer alternatives to developing countries, and defend the rules-based order against new challenges from China and the BRI. Consequently, as the existing geopolitical landscape becomes bumpier and in the coming days, we may see a riskier contest between East and West.
As the head of America’s Indo-Pacific Command, Admiral Philip Davidson, put it in testimony to a US Senate committee, the BRI now represents Beijing’s bid to “shape a world aligned with its own authoritarian model while undermining international norms such as the free flow of commerce and ideas.”
Yet it is also undeniable that China is accumulating substantial – at times decisive – financial and political leverage across the geopolitical map, acquiring new stakes in key ports, new political allies, new resupply points for the Chinese navy, and new destinations to export elements of its authoritarian model and censorship regime. Even if the BRI fails to meet its lofty ambitions or ends up generating as much resentment as fealty, it is extending China’s reach and altering the geopolitical balance of the Indo-Pacific region in the process.
Therefore, the BRI has drawn extensive attention from academics and policymakers. The range of opinion varies from economic cooperation and win-win initiative to Chinese grand strategy, which allows China to use its sharp power across the region. Initially through trade, finance, and infrastructural tools that open an avenue to use for multiple purposes such as security in the long run to counter the US dominance in the Euro Asian region.
However, Washington’s new aggressive stance poses a challenge to Xi, a princeling who has promoted a more assertive foreign policy, in sharp contrast with Deng Xiaoping’s cautious approach of “hide your strength, bide your time, never take the lead.”