The People’s Republic of China and the United States are locked in a serious geopolitical competition. As an emerging global economic and strategic player, China (together with Russia) wants a multi-polar world order. Yet, the United States cannot easily relinquish its traditional status as a dominant world actor. Both sides have engaged in strategies that could prove to be very costly for them and the rest of the world.
China’s Belt and Road Initiative (BRI), with a trillion-dollar price tag, funded largely by Chinese grant-in-aid and loans, is at the centre of the country’s strategy and America’s reaction to it. Beijing has presented the Initiative as a strategy for global economic development and prosperity, leading some to claim it as China’s Marshall Plan. By the same token it is designed to link China through massive infrastructural, economic and trade projects to some 152 countries in Asia, Europe, Africa and Latin America for mutual advantages.
However, the United States and some of its allies as well as India have remained highly sceptical of the Initiative. They believe that it has a serious political and strategic dimension, designed to enhance China’s global influence vis-à-vis the Western alliance. In a counter move, the United States has not only unfolded a policy of pivot to Asia, which started during Barack Obama’s presidency. It has also engaged, under President Donald Trump, in balancing its trade with China to its advantage, enhancing American force deployment in the Gulf and instituting a policy of maximum pressure on those countries that have become receptive to Chinese influence.
Two critical interlinked planks of the BRI are the China-Pakistan Economic Corridor (CPEC) and the New Silk Road.
Pakistan has assumed a central place in the BRI. Against the backdrop of long-standing Pakistan-Chinese close strategic friendship, partly framed by Indo-Pakistan rivalry and Sino-Indian differences, Chinese President Xi Jinping visited Pakistan in 2015, inaugurating CPEC. This constituted a significant aspect of the BRI, for which Beijing initially offered Islamabad $45 billion largely on loan.
CPEC was to involve construction and overhauling of roads, railways, ports, hydro-electric dams and stations, to modernise Pakistan’s infrastructure and meet the country’s acute energy shortage. But they were also to connect China from its border with Pakistan to the latter’s Gwadar port on the Arabian Sea, and by extension to the Arabic Gulf, the New Silk Road and Southeast Asia.
Some of the CPEC projects have been completed and some are in progress, with an end-date of 2030. However, the cost of CPEC has already blown out to more than $60 billion, and many of its projects have been hampered by internal political disputes and the dire economic situation in Pakistan as well as the country’s conflict with India, which has decided not to join the BRI, calling it a ‘debt trap’. Islamabad halted some of the CPEC projects in 2018 for a year’s review. The recently elected government of Imran Khan has blamed its predecessor Prime Minister Nawaz Sharif, who has been incarcerated on charges of corruption, for dodgy dealings. The fear is that the projects also involve thousands of Chinese being employed, and that with Chinese aid, expertise and loans would come Chinese influence and Pakistan’s long-term financial indebtedness to China.
Meanwhile, Islamabad has come under increasing pressure from the United States not to fall into the Chinese orbit. Despite massive American aid in the past, Pakistan has needed repeated International Monetary Fund (IMF) bailouts. Prior to Islamabad’s latest request for another IMF loan, US Secretary of State Mike Pompeo cautioned the IMF not to aid Pakistan so that it could pay off Chinese loans. Although the IMF approved a three-year, $6 billion loan for Pakistan last July, Pompeo’s remarks are very telling about America’s concerns that the BRI is as much of a political initiative as it may be an economic developmental scheme.
While Pakistan is designated to serve as the BRI’s north-south corridor, the New Silk Road infrastructural and economic development has unfolded to open an East-West corridor, linking China through the Central Asian Republics, Iran and Turkey, not to mention Russia, to Europe and from there to Africa. The Central Asian Republics have certainly been receptive to the scheme that could also shield them against a return of excessive Russian influence. Iran and Turkey have also not shown an aversion to it, given their different levels of opposition to the United States.
Iran and China have historically had strong economic, trade and defence ties. However, Chinese investment in many Iranian infrastructural, developmental and defence projects has substantially increased as US-Iranian relations have deteriorated. Today, China is one of Iran’s main trading partners. The same also goes for Iran’s relations with Russia, though not to the same extent as China. Turkey has increasingly tilted towards China and Russia over the last few years, given its disillusionment with its NATO allies, the United States in particular. This has especially been so following the 2016 failed coup against President Tayyip Erdoğan and the President’s crackdown on the opposition, which has not been backed by Turkey’s NATO allies.
The two countries’ growing ties with China, not to mention Russia, have concerned Washington. The latest heightened Tehran-Washington and Ankara-Washington tensions and the US military build-up in the Gulf to enhance America’s regional military capability cannot entirely be divorced from this concern. While President Trump goes hot and cold on Ankara, his policy of maximum pressure on Iran is at least partly aimed at containing China’s expanding role in the region. In response, Iran, Russia and China have also decided to hold joint naval exercises in the Gulf.
US-Chinese rivalry in West Asia is now a reality. As Beijing seeks to extend its influence in the context of its BRI, the US is adopting counter-measures. While this is not expected to lead to a US-Chinese confrontation, the economic and strategic rivalry between the two powers is set to continue as a critical factor in influencing the regional landscape.
Amin Saikal is Distinguished Professor and a fellow of the Academy of Social Sciences in Australia.
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