China’s belt and road plans for Southeast Asia face uncertain ‘long-term prospects’ as social, environment concerns persist: study

Worries about the Belt and Road Initiative’s environmental and social costs ‘are likely to hinder progress’, according to the ISEAS-Yusof Ishak Institute report

Beijing ‘remains committed’ to the region’s projects, but has pivoted more towards ‘soft’ health and digital infrastructure amid the pandemic, it found

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A Chinese worker in Luang Prabang carries materials for the China-Laos Railway, which opened in December. An influx of unskilled Chinese workers has fuelled tensions surrounding Southeast Asia’s belt and road projects. Photo: AFP

Published: 5:43pm, 2 Jun 2022Updated: 12:10pm, 3 Jun 2022

Disputes over compensation, forced relocations and an influx of unskilled Chinese workers continue to plague belt and road projects in Southeast Asia, as the pandemic has sped up China’s pivot towards prioritising digital and health infrastructure, according to a new report.

Concerns about the social and environmental costs of the Belt and Road Initiative “will persist”, the study published last week by Singapore’s ISEAS-Yusof Ishak Institute said, influencing local perceptions on Beijing’s push to grow global trade and possibly jeopardising associated projects’ “long-term prospects” if left unaddressed.

In Indonesia, which hosts 40 active belt and road projects – the most of any Southeast Asian nation – fears that unskilled Chinese workers “have occupied jobs reserved for locals” is fuelling tensions, according to the study titled “Assessing the Belt and Road Initiative in Southeast Asia amid the Covid-19 Pandemic”. In 2020, students on Indonesia’s eastern island of Sulawesi held protests against what they said were “illegal” foreign workers stealing jobs from locals, even reportedly stopping cars leaving the airport at Kendari to hunt for Chinese nationals.

A China-backed dam under construction near Luang Prabang, Laos, in 2019. Chinese dams “are correlated to increasingly frequent droughts” on the Mekong River, the report found. Photo: Shutterstock

Meanwhile in Laos, with its 12 active belt and road projects, the report found that “many villagers” were still waiting on the compensation they had been promised after being displaced by “mega projects” such as China-backed dams across the Mekong River and a new high-speed railway. Chinese dams “are correlated to increasingly frequent droughts and loss of fish stocks and farmland in downstream countries,” the study said.

“Southeast Asia rose to become the top belt and road investment destination in 2020, despite a steep decline in China’s overall belt and road investments worldwide,” wrote Wang Zheng, a visiting fellow at the ISEAS-Yusof Ishak Institute and the study’s author. “Nevertheless … challenges stemming from the ongoing pandemic and local concerns about social and environmental costs are likely to hinder the progress of belt and road projects in the region.”

Health, digital pivot

Travel restrictions, lockdowns and other pandemic-era curbs have disrupted Beijing’s global belt and road push over the past two years. But Wang’s study, which analysed an original data set tracking major China-financed projects, found that Beijing “remains committed” to boosting the progress of its projects in Southeast Asia.

Most of these projects are currently clustered in the energy (29 per cent), transport (23 per cent) and metals (18 per cent) sectors, the study found. Yet it said the data also showed China’s efforts to diversify belt and road projects by expanding into healthcare services, telecommunications, and education in Southeast Asia.

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