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How China is Weaponising its BRI Investments

By: Rahul Mishra

Last Updated: July 04, 2022, 10:52 IST

Even though China failed to secure a region-wide security pact with countries of the South Pacific region, the fact that it has made deep inroads into the South Pacific Islands region cannot be overlooked. Recent agreement with Samoa is a case in point.
(Image: AP/AFP Pool)

Even though China failed to secure a region-wide security pact with countries of the South Pacific region, the fact that it has made deep inroads into the South Pacific Islands region cannot be overlooked. Recent agreement with Samoa is a case in point. (Image: AP/AFP Pool)

In the midst of growing competition with the US and its allies, China is actively looking out for military partners and ports in the region

The US-China competition is getting intense with each passing day, with China having fast-emerged as a systemic rival to both the US and other members of NATO (North Atlantic Treaty Organization). This is evident from NATO’s 2022 Strategic Concept approved at NATO’s Summit in Madrid on 29 June. Although, according to some reports, the US and the UK hold much stronger views on China compared to Germany, France and the EU, the strategic concept itself has taken a giant qualitative leap forward in comparison to its previous avatar launched in 2010, which did not even mention China as a cause of concern for NATO and its allies.

In its 2022 strategic concept, NATO notes that as a “systemic challenge”, China has been exploiting politico-military, economic and diplomatic tools for its power projection and greater regional and global presence. The paper also takes note of China’s hybrid and cyber overt and covert operations premised on its mala fide intentions, which often run counter to its calls for peaceful co-existence and “win-win” foreign policy rhetoric.

Along with its island reclamation and militarisation activities, China is increasingly using maritime militia to dominate the South China Sea. It is rapidly equipping itself with anti-access/area denial (A2/AD) capabilities in its so-called first island chain which includes Okinawa (Japan), Taiwan, and the Philippines within the wider East and South China Seas. With the use of swarms and advances made in artificial intelligence in military warfare, China is trying to establish its domination over pockets of the South China Sea region.

On the economic side, and politico-strategic projection of trade, investment and economic aspects, the central piece of China’s power projection through greater regional and international presence has been its Belt and Road Initiative. According to the Green Finance & Development Center, of Shanghai’s Fudan University, 147 countries have so far agreed to collaborate with China’s Belt and Road Initiative projects. This, by no means, is a small number. Through its investments, loans, and grants, China has built stronger ties with countries across continents.

So formidable is China’s BRI challenge that it led the G7 countries to come up with an infrastructure development partnership initiative to counter China’s BRI in their latest summit held in Germany. The Partnership for Global Infrastructure and Investment (PGII), earlier termed the Build Back Better World (B3W), is a joint initiative to fund infrastructure projects in developing countries. The G7 members aim to mobilise $600 billion by 2027 to counter China’s BRI, which, according to critics, has been ‘predatory’ in nature and tends to create strategic dependencies in the host countries making them dependent on Chinese money and potential victims of ‘debt trap’ diplomacy of China.

The economic collapse of Sri Lanka is one such example. Not complying with universally accepted norms and rules of investment practices lead to a Sri Lanka-like fiasco. Between 2010 and 2019, China (plus Hong Kong) accounted for 37.4 percent of total inbound investment in the country. While panda huggers would still blame Sri Lanka for all that is happening in the country, the question that begs an answer is: Why did China overlook international norms and rules of providing loans and investments in Sri Lanka when other major powers and international agencies such as the International Monetary Fund and the World Bank were not willing to provide any more investments or loans to Sri Lanka?

Over the past few years, China has acquired greater access to strategically located ports and surveillance facilities in the Indian Ocean as well as the Pacific waters. After Djibouti, Sri Lanka (Hambantota), Pakistan (Gwadar), and presumably Myanmar (Kyak Phu), China’s recent catch was the Solomon Islands. Interestingly, all these countries are among the largest recipients of Chinese investments and grants/loans.

Even though China failed to secure a region-wide security pact with countries of the South Pacific region, the fact that it has made deep inroads into the South Pacific Islands region cannot be overlooked. Recent agreement with Samoa is a case in point.

Within a few days from the South Pacific disaster, where some of the South Pacific Island Forum countries publicly declined the Chinese offer to sign a security pact, China made another important strategically significant move — this time in the Southeast Asian region.

According to reports, China has agreed to fund the upgradation plan for Cambodia’s Ream naval base which is strategically located in southern Cambodia and juts out into the Gulf of Thailand, which faces the South China Sea.

At the ground-breaking ceremony held earlier in June, Wang Wentian, the Chinese Ambassador to Cambodia, termed the cooperation between the two countries an “ironclad partnership” — a term that is often used to explain the China-Pakistan relationship. China is the biggest foreign investor in Cambodia, accounting for 53.4 percent of the total inbound investment.

While it is true that the Ream port upgradation is still at a nascent stage, one cannot deny the possibility of its use for military purposes in times to come. It is “intentions” after all that precede “capabilities” in influencing a state’s behaviour. The Ream base could be a direct monitoring station in the South China Sea. It is important to assess the reasons behind China’s interests in the base if it had no military-strategic intentions or calculations? Even though the Ream base is not the only access point to the South China Sea or the Malacca Straits, it certainly gives China an added advantage. Having multiple fronts is the key to bolstering security against an adversary — and that makes the Ream deal crucial and perhaps a cause of concern for the US and Australia.

China’s practices on such issues remain opaque and the practice is less than satisfactory. Clearly, through such weak investments, China seeks to create greater dependencies and trap the countries in a vicious debt circle. This is also explained by the fact that in the midst of growing competition with the US and its allies, China is actively looking out for military partners and ports in the region.

The writer is Director, Centre for ASEAN Regionalism Universiti Malaya (CARUM), at the Asia-Europe Institute, University of Malaya, Malaysia, where he heads the European Studies programme. His latest publications include Asia and Europe in the 21st Century: New Anxieties, New Opportunities (Routledge, 2021), and India’s Eastward Engagement from Antiquity to Act East Policy (SAGE, 2019). The views expressed in this article are those of the author and do not represent the stand of this publication.

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first published:July 04, 2022, 10:37 IST
last updated:July 04, 2022, 10:52 IST