Special Report – Belt and Road

Win-win cooperation could help China tackle the security threats to its trade strategy

Economic benefits of the initiative are potentially huge, but so too are the security risks that can arise in a region that is often volatile and dangerous

PUBLISHED : Monday, 19 March, 2018, 11:30am
UPDATED : Monday, 19 March, 2018, 11:30am

China’s push to expand its signature “Belt and Road Initiative” could generate significant economic benefits, but its expansion in often-volatile countries has led to overlooked security concerns.

Through land and maritime trade routes, mainland China’s cross-continental trade strategy mainly crosses Eurasia, which is home to some of the most politically volatile and dangerous regions. Ensuring security along trade routes to protect investment and commerce is key to the initiative’s success.

“The maintenance of security along the ‘Belt and Road Initiative’ region is still less than adequate,” says Liu Haiquan, associate professor of the department of humanities and sciences at Shanghai University of International Business and Economics. “China should play a coordinator role under the premise of insisting on win-win cooperation.”

There are a number of security concerns throughout the trade initiative countries, including terrorism, political instability and piracy.

Terrorism is a significant concern in the Middle East, North Africa, Central and South Asia as well as Southeast Asia.

For example, in Afghanistan and Pakistan, which share borders with China, militants have set up bases using mountainous terrain and existing terrorist networks. Tighter economic links with those countries is drawing China closer to terrorist threats that could undermine the success of the China-Pakistan Economic Corridor, an important part of the trade initiative, with around US$60 billion worth of infrastructure.

There are also terrorist threats in energy-rich Central Asia, a key node linking China to Europe and the Middle East. Terrorism creates security risks for energy-related investments in this region where China has invested heavily. China National Petroleum, for instance, owns a stake in the giant Kashagan oil field in the Caspian Sea.

At the same time, ethnic separatism in Xinjiang and the expansion of religious extremism abroad have turned Central Asia into a breeding ground for terrorist groups such as the Islamic Movement of Uzbekistan and the East Turkestan Islamic Movement.

A second consideration for security is political instability. Internal political turmoil in some of the economies that make up the trade initiative jeopardises economic cooperation which, ironically, is sometimes aggravated by aggressive Chinese investment projects that suppress domestic players and fuel social discontent.

At times, domestic factors such as elections expected this year in Cambodia and Malaysia in Southeast Asia can exacerbate political instability or lead to transfers of power to parties with a less pro-China stance. A third consideration is piracy, which has a direct impact on security on the portion of the trade initiative that depends on maritime trade routes.

The maintenance of security along the ‘Belt and Road Initiative’ region is still less than adequate
Liu Haiquan, Shanghai University of International Business and Economics

As much as 70 per cent of all petroleum shipments travel from the Middle East, through the Indian Ocean and to the Pacific Ocean. Most of China’s ocean-going oil trade is concentrated in the Strait of Malacca. Last year, US officials said piracy was on the rise again off the coast of Somalia.

China has taken significant steps to tackle rampant piracy there, most notably by enhancing its naval presence.

“Last August, China set up its first overseas military base outside of its immediate region in Djibouti,” says Sean Kenji Starrs, assistant professor of international relations of the department of Asian and international studies of City University of Hong Kong. “This is a very strategic location for operations in the Horn of Africa.”

Djibouti has served as a supply base for China’s anti-piracy operations since 2008.

There are also agreements between China and major ports in Sri Lanka and Pakistan, and Myanmar, for Chinese ships to dock, Starrs says.

“It is known as the ‘String of Pearls’ strategy for China to project force into South Asia, the Middle East and Africa, and to try to overcome the Strait of Malacca problem,” he adds.

Perhaps ironically, success in developing the trade initiative could help alleviate some of the security concerns that exist today. Increased Chinese engagement could help drive economic growth and address some concerns. After all, as experts point out, there is no possible development without security and no security without development.

“China’s diplomacy has the tradition of valuing great powers and relatively ignores small and middle-sized countries,” Liu says. “There are many small and mid-sized countries along the ‘Belt and Road Initiative’ region, which will bring higher security risks to China’s promotion of the initiative.”

China will also have to overcome scepticism about its intentions as it asserts its growing military strength and establishes a presence in strategic locations to protect investments. China’s US$10 billion project in Myanmar’s strategically important sea port sparked local concerns and China ended up agreeing to a lower stake. Another Chinese investment in Pakistan’s Gwadar port, a strategic access point to the Gulf region, also seemed suspicious to many.

“India, in particular, sees China’s encroachment into its sphere of influence in South Asia as a threat,” Starrs says.

Some Asian countries have responded by trying to bind the US more into the region, with Vietnam inviting the US Navy back into Danang and India expanding relations with the US.

“China needs to strive for trust from pivot nations,” Liu says. “Some of neighbouring countries have doubts about China’s initiative, which will set back economic cooperation with these countries due to political factors, especially nationalism.”