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131. Pakistan and CPEC Are Drawn Into the U.S.-China Rivalry

Author:
Adnan Aamir
Publication Date:
01-2020
Content Type:
Journal Article
Journal:
China Brief
Institution:
The Jamestown Foundation
Abstract:
Leaders in the People’s Republic of China (PRC) and the Islamic Republic of Pakistan were stunned in late November when a senior U.S. government official issued a strong verbal attack on the China-Pakistan Economic Corridor (CPEC). On November 21 in Washington, D.C., U.S. Assistant Secretary of State for the Bureau of South and Central Asia Affairs Alice Wells spoke at length about the CPEC at a public event, criticizing multiple elements of the $62 billion flagship component of China’s Belt and Road Initiative (BRI). Ambassador Wells cast doubt upon claims that CPEC will generate sustainable economic development in Pakistan and criticized the project’s cost escalations and non-transparent processes of awarding CPEC contracts to Chinese firms. She appealed to Pakistan’s citizens to ask tough questions of the PRC regarding the CPEC and China’s related projects in Pakistan (U.S. State Department, November 21, 2019). In the past, the U.S. government had raised concerns over CPEC and China’s “debt-trap diplomacy,” but it had never presented such a direct and detailed set of criticisms. Ambassador Wells crossed that line—bringing the notoriously stalled out CPEC back under international scrutiny just after Chinese and Pakistani leaders had brokered a cautiously optimistic set of funding deals to jumpstart progress a month before (Ministry of Foreign Affairs (PRC), October 9, 2019). Chinese representatives were quick to respond to Ambassador Wells’s criticisms. The next day, PRC Ambassador to Islamabad Yao Jing(姚敬) said that he had been “shocked and surprised to see the remarks of Alice,” and that Ambassador Wells lacked accurate knowledge and had relied on “Western media ‘propaganda’” for her accusations. He called on the U.S. to “show your evidence, give me evidence” of specific cases of corruption related to the CPEC, and questioned whether Wells was taking potshots at the CPEC to score political points. Ambassador Yao challenged the U.S. to suit its actions to its words: “If there is any sincerity… [the U.S. should] come forward to invest in Pakistan. We [China] welcome U.S. investment in Pakistan.” (INP (Pakistan), November 22, 2019; VOA, November 22, 2019). In addition to refocusing negative attention on the CPEC, Assistant Secretary of State Wells’ speech drew a reluctant Pakistan further into the tumultuous U.S.-China political rivalry. Pakistan faces a balance of payments crisis and a severely weakened currency, which has led it to grow increasingly dependent on economic ties with China. At the same time, the Pakistani leadership has navigated a complex and multifaceted historic security and political partnership with the U.S. If, as Ambassador Wells’ statement seems to imply, Pakistan’s engagement with China is seen to come at the expense of its bilateral relationship with the U.S. – or vice-versa – then Pakistan’s delicate power balancing diplomacy will soon become even more tenuous.
Topic:
Diplomacy, International Cooperation, International Trade and Finance, Leadership, and Conflict
Political Geography:
Pakistan, China, Middle East, Asia, North America, and United States of America

132. The Future of Chinese Foreign Economic Policy Will Challenge U.S. Interests, Part 1: The Belt-and-Road Initiative and the Middle Income Trap

Author:
Sagatom Saha
Publication Date:
01-2020
Content Type:
Journal Article
Journal:
China Brief
Institution:
The Jamestown Foundation
Abstract:
Chinese Communist Party (CCP) General Secretary Xi Jinping and other senior CCP leaders have prudently planned for the slowing economic growth that China now faces. CCP officials plan to transition China from its current export-led growth model to one driven by indigenous innovation, and one in which China’s rising global prominence confers to it many of the same advantages traditionally enjoyed by the United States (such as low borrowing costs and influence within international institutions). Although U.S.-China relations have become further fraught amid the trade war, many prominent China hands nevertheless assert that Beijing’s long-term economic plans do not run counter to U.S. strategic interests. [1] However, many of China’s planned foreign economic initiatives—to include the Belt and Road Initiative (BRI), global value chain advancement, and renminbi (RMB) internationalization—will come at U.S. expense. Policymakers in both Washington and Beijing should accordingly expect U.S.-China tensions to persist beyond the Trump administration. China’s need for new growth vehicles is twofold: its economic size has not translated into global influence, and its current economic model is losing steam. First, China’s transformation into the world’s second-largest economy has yet to yield equivalent influence in the international system. Beijing’s sway in the World Bank and the International Monetary Fund (IMF), for example, lag behind China’s status as the largest trade partner and foreign investor for much of the world. The United States, by contrast, has leveraged its economic status to maintain effective control of the Bretton-Woods institutions, to obtain low borrowing costs, and to exercise punishing sanctions programs against unfriendly governments. Second, Chinese growth has seen a secular decline over the last decade (see figure 1). The official projected GDP growth rate for 2020 is 6.1 percent (Xinhua, November 30, 2019), but some Chinese officials have hinted that they expect lower sub-6 percent growth in 2020 (South China Morning Post, November 14, 2019). This is a noteworthy signal, for CCP discourse has previously identified the benchmark of 6 percent GDP growth as necessary to avoid social unrest (China Brief, March 22, 2019).
Topic:
Foreign Policy, Economics, International Cooperation, International Trade and Finance, Hegemony, Conflict, and Rivalry
Political Geography:
China, Middle East, Asia, North America, and United States of America

133. Sino-Indian Cooperation on Counter-Terrorism: Not Truly “Hand-in-Hand” At All

Author:
Sudha Ramachandran
Publication Date:
02-2020
Content Type:
Journal Article
Journal:
China Brief
Institution:
The Jamestown Foundation
Abstract:
On December 7, 2019, infantry units of the Indian Army and the Chinese People’s Liberation Army (PLA) commenced the “Hand-in-Hand 2019” combined military exercise at Umroi in the northeastern Indian state of Meghalaya. The fortnight-long exercise ran through December 20, and focused on counter-terrorism operations in semi-urban terrain: to include training evolutions such as cross-training on small arms, hostage rescue, and recognizing improvised explosive device (IED) traps. Approximately 130 personnel from each country participated in the exercise, with the PLA contingent consisting of troops stationed in Tibet (Indian Ministry of Defense, December 2, 2019; Global Times, December 8, 2019; China Military Online, December 23, 2019). It was in January 2001 that the People’s Republic of China (PRC) first expressed interest in cooperating with India in combating terrorism (The Hindu, January 14, 2001). Since then Beijing and New Delhi have taken several steps to facilitate such cooperation: the two sides have set up a Counter-Terrorism Dialogue Mechanism, a Joint Working Group on Counter-Terrorism, and a High-Level Dialogue on Counter-Terrorism and Security to facilitate such engagement. In addition to leadership-level discussions, officials are engaging in talks on a range of terrorism-related issues. In October 2018, the two sides signed an Internal Security Cooperation Agreement, which aims at strengthening cooperation in areas such as counter-terrorism, intelligence sharing, and narcotics control (Business Standard, October 22, 2018). The “Hand-in-Hand” exercises were first set in motion in 2007, and the December 2019 training in Meghalaya represented the eighth round of these counter-terrorism exercises. Such events—as well as the joint agreements between the two governments—present a picture of India and China as closely engaged on counter-terrorism issues. The truth is quite different, however—and the two sides are far from “hand-in-hand” in their understanding of terrorism.
Topic:
Defense Policy, Diplomacy, International Cooperation, Military Strategy, and Counter-terrorism
Political Geography:
China, India, and Asia

134. The Future of Chinese Foreign Economic Policy Will Challenge U.S. Interests, Part 2: Renminbi Internationalization and International Economic Institutions

Author:
Sagatom Saha
Publication Date:
02-2020
Content Type:
Journal Article
Journal:
China Brief
Institution:
The Jamestown Foundation
Abstract:
Complications surrounding the Belt and Road Initiative (BRI), and the dangers of the “middle-income trap,” are not the only factors impacting the international economic policies of the People’s Republic of China (PRC). Furthermore, poor capital efficiency is not the only feature of the Chinese economy that frustrates the country’s policymakers. China’s gross domestic product (GDP) has roughly doubled in the last decade, but Beijing’s pull in the international monetary and financial system remains lackluster. This lack of progress stems in part from the dollar’s centrality around the world, as well as U.S. dominance in international economic institutions. Beijing’s economic planners have long advocated against the dollar while attempting to increase the global role of the PRC’s own renminbi (RMB) currency. While past efforts stumbled, RMB internationalization and increased Chinese influence will directly confront U.S. economic and geopolitical interests.
Topic:
Economics, International Cooperation, International Trade and Finance, Hegemony, Conflict, and Rivalry
Political Geography:
China, Asia, North America, and United States of America

135. China-Iran Relations: The Not-So-Special “Special Relationship”

Author:
John Calabrese
Publication Date:
03-2020
Content Type:
Journal Article
Journal:
China Brief
Institution:
The Jamestown Foundation
Abstract:
Over the years, unremitting hostility between the United States and the Islamic Republic of Iran has created opportunities as well as dilemmas for the People’s Republic of China (PRC). The Trump administration’s unilateral withdrawal from the Joint Comprehensive Plan of Action (JCPOA) in May 2018, and the subsequent adoption of a “maximum pressure” campaign against Iran, presented mixed challenges and opportunities for the PRC. Beijing has sought to exploit the rift between Washington and Tehran without further fueling Sino-American tensions. For the past year, Washington and Tehran have been locked in an action-reaction cycle of escalation. This dangerous spiral reached new heights with the January 2 U.S. drone strike that killed Iranian Islamic Revolutionary Guard Corps Quds Force commander General Qasem Soleimani, which was followed by retaliatory Iranian missile attacks on two coalition bases in Iraq that injured dozens of American troops. Although both sides managed to pull back from the brink of war in early January, underlying tensions remain—as does the possibility of a more direct military confrontation. In what manner and to what extent has the current unstable situation affected China’s interests in, and relationship with, Iran? What is the likelihood that, as this latest round of high-stakes poker between Washington and Tehran continues to unfold, Beijing will seize it as yet another opportunity to profit from America’s entanglements in the wider Middle East?
Topic:
Diplomacy, International Cooperation, Bilateral Relations, and Strategic Interests
Political Geography:
China, Iran, Middle East, and Asia

136. China’s Deepening Diplomatic and Economic Engagement in Afghanistan

Author:
Syed Fazl-e Haider
Publication Date:
04-2020
Content Type:
Journal Article
Journal:
China Brief
Institution:
The Jamestown Foundation
Abstract:
On February 29, U.S. and Taliban representatives signed the “Agreement for Bringing Peace to Afghanistan” in Doha, Qatar, which laid out a framework for ending the 18-year old conflict in Afghanistan (U.S. State Department, February 29). Despite skepticism in many quarters regarding the viability of the deal, the negotiations leading to the agreement have been supported by many international actors, to include the government of the People’s Republic of China (PRC). On February 18, PRC Foreign Ministry spokesman Geng Shuang (耿爽) commented on the U.S.-Taliban negotiations by stating that “China firmly supports the broad and inclusive peace and reconciliation process [and] welcomes the news that the U.S. and the Taliban are expected to reach and sign a deal… China stands ready to step up cooperation with all parties to the Afghan issue and the international community for peace, stability and development in Afghanistan” (PRC Foreign Ministry Briefing, February 18). As the U.S plans to draw down its forces in Afghanistan—a key element of the February 29 deal—China is set to further deepen its involvement in Afghanistan (Nikkei Asian Review, January 14, 2019). Beijing wishes to achieve at least two key objectives. First, it wants once and for all to block any contact between the Taliban and ethnic Uighur Muslim militants seeking independence from China (China Brief, April 24, 2019). Second, the PRC wants long-term stability in Afghanistan in order to extend the China-Pakistan Economic Corridor (CPEC)—the flagship project of China’s Belt and Road Initiative (BRI)—to the war-wracked country. Beijing sees Afghanistan as a primary link between the Central Asian republics and the CPEC (China Brief, December 10, 2019). To achieve its objectives, Beijing has pursued positive engagement with the Taliban movement that controls more than half of Afghanistan’s territory. These ties have increased over the past couple of years: for example, in 2019 Taliban representatives paid at least two visits to Beijing (in June and September) for talks with PRC officials (CGTN, June 20, 2019; Al-Jazeera, September 23, 2019).
Topic:
Development, Diplomacy, International Cooperation, and Strategic Interests
Political Geography:
Afghanistan, China, Middle East, and Asia

137. Mind the Trap: What Basing Rights in Djibouti and Sri Lanka Reveal About the Limitations of Debt as a Tool of Chinese Military Expansion

Author:
Scott Wingo
Publication Date:
04-2020
Content Type:
Journal Article
Journal:
China Brief
Institution:
The Jamestown Foundation
Abstract:
On November 24, 2019, Sri Lankan President Gotabaya Rajapaksa told reporters during his first interview as president that he hoped to renegotiate the terms of the deal that gave a Chinese firm a 99-year lease over the Hambantota Port (Strategic News International, November 24, 2019). The port had been handed over as Sri Lanka struggled to make loan payments on the loss-making Chinese-built facility—thereby leading to debates as to whether the People’s Republic of China (PRC) had set a “debt trap” by intentionally lending Sri Lanka more than it could afford to repay, in hopes of eventually foreclosing on the port (China Brief, January 5, 2019). The subtext was that with a leasehold in hand, the PRC could use the port as a naval installation geared toward patrolling Indian Ocean shipping lanes. As can be observed by the Sri Lankan government’s desire to renegotiate, this has not happened. To the contrary, Sri Lankan security policy has trended against China since the debt-equity swap occurred. A comparison with Djibouti, where the PRC has established its only overseas military base to date, illuminates how this came to pass. In both Djibouti and Sri Lanka, Beijing has used infrastructure loans as a means to entice political leaders to allow naval access. However, three factors led to very different outcomes: 1) the recipient countries’ inherent willingness to host a base; 2) the degree of political competition faced by recipient leaders; and 3) the degree to which recipient leaders can diversify toward different sources of funding to reduce overreliance on China.
Topic:
Debt, Imperialism, International Cooperation, Military Strategy, and Hegemony
Political Geography:
China and Asia

138. The China-Myanmar Economic Corridor: Delays Ahead

Author:
Sudha Ramachandran
Publication Date:
04-2020
Content Type:
Journal Article
Journal:
China Brief
Institution:
The Jamestown Foundation
Abstract:
Although no new deals were struck during People’s Republic of China (PRC) President Xi Jinping’s trip to Myanmar on January 17 and 18, the visit was significant for several reasons. The visit was the first by a PRC president to Myanmar in 19 years, and the first by Xi to this country in his role as president. The visit was widely touted as marking the 70th anniversary of the establishment of relations between the PRC and Myanmar. However, Xi’s first trip abroad this year was aimed at expediting implementation of the China-Myanmar Economic Corridor (CMEC), a key component of China’s Belt and Road Initiative (BRI) (CGTN, January 17). During the visit, the two governments signed 33 agreements, memorandums of understanding, protocols and letters of exchange relating to railways, industrial and power projects, and trade. Several of these agreements firm up Myanmar’s commitment to the CMEC’s three central components: the Kyaukphyu Special Economic Zone (SEZ), which includes a deep-sea port, an industrial park and other projects; the China-Myanmar Border Economic Cooperation Zone; and an urban development plan for Yangon (The Irrawaddy, January 18). However, just weeks after Xi’s visit saw the two sides take steps to expedite CMEC projects, Beijing’s plans have run into new problems. CMEC projects are running late, and in an op-ed piece published on the eve of his Myanmar visit, Xi stressed the need for CMEC projects to be moved from “the conceptual stage to concrete planning and implementation” (New Light of Myanmar, January 16). The coronavirus pandemic has emerged as the latest challenge in the long list of obstacles that have slowed CMEC projects over the years. According to Khriezo Yhome, a New Delhi-based analyst of developments in Myanmar, it “may be too early to assess the impact of the coronavirus crisis on CMEC projects,” given that the pandemic is still only at an “initial phase” in Myanmar; however, there is “no doubt” that it “will slow down the implementation of CMEC projects in the short-term.” [1]
Topic:
Diplomacy, Economics, International Cooperation, International Trade and Finance, and Bilateral Relations
Political Geography:
China, Asia, Burma, and Myanmar

139. The United States Should Prioritize Energy Cooperation With Taiwan

Author:
Patrick Yu
Publication Date:
01-2020
Content Type:
Special Report
Institution:
Center for American Progress - CAP
Abstract:
Solving Taiwan’s energy problems is an opportunity for the United States to achieve multiple goals.
Topic:
Energy Policy, International Cooperation, Strategic Interests, and Energy Crisis
Political Geography:
China, Taiwan, Asia, North America, and United States of America

140. The Embrace Between a Russian Bear and the Panda Bear. An Emerging Sino-Russian Axis

Author:
Jens Bastian
Publication Date:
06-2019
Content Type:
Working Paper
Institution:
Hellenic Foundation for European and Foreign Policy (ELIAMEP)
Abstract:
During a three-day official visit to Moscow in June 2019 the Chinese President Xi Jinping described Russia’s Vladimir Putin as his “best friend”. While China-US relations are deteriorating over bitter trade disputes, the imposition of tit-for-tat tariffs and intellectual property rights, the Sino-Russian partnership is evolving and deepening in areas such as security and defense, bilateral energy cooperation as well as the Kremlin’s expanding participation in China’s Belt and Road Initiative (BRI). Both Beijing and Moscow are building an alliance shaped by shared grievances and based on mutual strategic convenience. Against this background the following report argues that the strategic realignment underway between the Kremlin and Beijing is not one of equal partners. Status matters between the leadership of both countries. Moscow cannot compete with China’s sweeping investment efforts and infrastructure projects in the context of the BRI. What is increasingly emerging in this relationship is a junior role for Moscow and senior status for Beijing. The trade balance is heavily tilted in China’s favor. Chinese banks are key lenders to Russia. The energy cooperation is defined by China being able to command prices from Russia below market rates. Most importantly, China’s BRI is a multi-decade vision, spacing continents and backed up by sheer unlimited financial resources which Russia cannot even contemplate to match. With Russia and China strengthening their cooperation across policy fields, individual countries and sub-regions in continental Europe are faced with new and challenging strategic choices. As Moscow consolidates its economic footprint in Serbia and Montenegro, Beijing expands its presence across Central and Eastern Europe in the context of the 17+1 network. Policy makers are thus faced with daunting options. Some see Beijing as the more promising alternative, while others are tempted to seeking accommodation with both Russia and China.
Topic:
Security, International Cooperation, Bilateral Relations, Belt and Road Initiative (BRI), Trade, and Strategic Interests
Political Geography:
Russia, China, and United States of America