Why Xi Jinping’s trade initiative hasn’t bought China affection, as neighbours chafe at being turned into client states

Pouring economic investment into Asian nations through the ‘One Belt, One Road’ strategy is unlikely to give China the influence it craves, economic analyst Tom Miller explains in a new book

PUBLISHED : Monday, 06 March, 2017, 1:02pm
UPDATED : Tuesday, 07 March, 2017, 4:40pm

China’s Asian Dream

by Tom Miller

Zed Books

4 stars

Tom Miller’s previous book, China’s Urban Billion, was a well-received examination of the processes and effects of the unprecedented scale of China’s urbanisation. Now Miller has moved on to an examination of China’s main diplomatic and economic strategy, the “One Belt, One Road” policy that aims to be the legacy of President Xi Jinping’s administration and to inspire China’s great rejuvenation.

As a senior analyst for economic research institute Gavekal Research and managing editor of the China Economic Quarterly, Miller brings a wealth of knowledge to the subject, as he examines China’s diplomatic and economic strategies, from its uneasy relations with India and Vietnam to the broader effects of its actions in the South China Sea.

What is the One Belt, One Road strategy all about?

What emerges is perhaps a central conflict between economic development and genuine influence. China’s efforts in building infrastructure are enormous. Every country Miller visits and discusses – Russia, Kazakhstan, Mongolia, Laos, Cambodia, Myanmar, India, Pakistan, Sri Lanka and Vietnam – can attest to huge development. Economic corridors, ports, railways and roads are being built at a phenomenal rate, even through some truly arduous landscapes.

A planned high-speed railway from Kunming to Singapore would include a “417km line from the Chinese border to Vientiane [and] will have 154 bridges and 76 tunnels”, while “the Laos section alone is projected to cost up to US$7 billion, around half the country’s annual economic output”. In Pakistan, “it took [five years] for the China Road and Bridge Corporation to complete five new tunnels and eighty bridges to reconnect the two sections of the [Karakoram] highway” following a landslide in the mountainous region near the countries’ border.

Yet for all China’s efforts, it is receiving little affection. Countries fear rather than welcome being drawn into China’s economic orbit. This is particularly true of nations where independence or liberty has been hard-fought. Miller shows how Myanmar, for example, has divested itself of Chinese influence and turned towards the west, China being seen as too close to the former military junta.

Similarly, Vietnam’s relations with China have long been fraught and are now deeply troubled thanks to competing claims in the South China Sea. Nonetheless, “20 per cent of Vietnam’s trade is with its northern neighbour, which is the source of nearly 30 per cent of its imports”. Vietnam thus has to tread a fine line, especially when there is a “visceral” hatred of China amongst ordinary Vietnamese.

Likewise, mutual suspicion and border squabbles have hindered India’s economic relations with China: exports to China declined 20 per cent from 2010 to 2014. India sees itself hemmed in by “a string of pearls”, its name for Chinese naval facilities across the Indian Ocean.

Xi Jinping’s ‘One Belt, One Road’ strategy is showing the way to a new world order

The most lasting forms of hegemony are those of shared outlook, rather than commercial factors or military power. Man is not homo economicus; he is deeply tribal, and – rightly or wrongly – concerned about the influence of outsiders. China lacks a threat to bind together its Asian neighbours in genuine partnership; indeed, for many of them, China is the threat. The frequently vaunted “win-win” development China seeks, for instance, is not so much a partnership of equals in covalent, mutually beneficial, harmony. The term deliberately obscures China’s strategic purpose of using economic development to subdue its neighbours into client states acquiescing with China’s geostrategic goals.

Independent nations naturally do not want their freedom of action diminished, yet China’s economic gravity is so strong that its neighbours are being forced to choose to what degree they will go along with this. Governments are also having to factor in domestic opposition to China’s encroachments: not everyone is happy to see their former way of life swept away on a tide of economic development, especially as Chinese companies tend to bring in Chinese employees rather than employing locals.

China’s Asian Dream is superbly organised, and Miller deftly combines the plethora of data points and statistics with vivid local colour. He describes people with “tobacco-stained teeth” and a “scraggly moustache”, and markets “selling everything from green Burmese jade and Puer tea to yak-bone jewellery and Tibetan leopard pelts”. He talks with vendors in local markets as well as officials and engineers.

Each chapter is a discussion of one geographical region, such as central Asia, the Indian Ocean, and the South China Sea. Each is then subdivided into the relevant nations and regions. While this schematic is helpful in organising the material, it can make the book feel like a series of unconnected essays: only the opening chapter, introducing the Belt and Road strategy and the Asian Infrastructure Investment Bank, gives an overview of the book’s contents.

But perhaps this was the right approach. China’s strategy is to focus almost exclusively on bilateral relations, where its economic heft gives it far greater clout than if it were simply considered one country among many. It relies on asymmetric trade deals which might properly be called “unequal treaties” (the GDP of Laos is just one-twentieth that of Yunnan, one of China’s poorest provinces).

But as long as the cash continues to flow, most countries and most people have gone along for the ride. What will happen if or when capital outflows dry up? China has not bought affection, but its economic power has answered all the questions – so far.