The End of the Chinese Century? New book critiques BRI's flawed assumptions

THE END OF THE CHINESE CENTURY? How Xi Jinping Lost the Belt and Road Initiative

Author: Bertil Lintner

Publisher: Harper Collins

Pages: 256

Price: Rs 499 

Bertil Lintner has spent decades reporting on Southeast Asia and its borderlands with India and China. He has deep familiarity with the history of the India-China conflictual relations and its current dynamic in this region. His latest book, The End of the Chinese Century?, uses the trajectory of China’s most ambitious global development project — the Belt and Road Initiative (BRI) — to assess its claim to be the superpower of the 21st century.

 

The BRI has been compared to the US Marshall Plan launched after the end of the Second World War to enable the recovery of the war-ravaged economies of western Europe. But China’s BRI is global in its scope and backed by large-scale resources. BRI is focused mainly on large infrastructure projects, particularly those that promote connectivity, access to sources of supply and access to markets. China’s objective has been to hard-wire the world with itself as the central node in the emerging transport and communications network. Mr Lintner’s survey of BRI projects a decade since the initiative was announced by Xi Jinping in 2013, delivers a negative report card. This is too sweeping a judgement. He deals mainly with the fate of Asian, African and some Latin American Chinese-financed projects. But in Europe, the Chinese purchase of the Piraeus port in Greece and linking it through modern rail and highway with the heart of Europe is both an economic and strategic success story. The transformation of Hungary as a freight and distribution centre for China-Europe trade is a major long-term transport and logistics hub for China.

 

Is the success of the BRI central to China’s claim that the 21st century is destined to be China’s century? Not quite. China was convinced that it is on the road to supplanting the US as the world’s number one economic power in nominal gross domestic product (GDP) terms, having already outpaced it in purchasing power parity terms. But more recently, the US has continued to outpace it in GDP.  China is the world’s largest trading power but is facing strong headwinds in an increasingly protectionist global market. It has tried to make the Chinese currency, the Renminbi (RMB) an international currency in the same league as the US dollar but has not succeeded and is unlikely to as long as it is unwilling to accept full convertibility of the RMB.

 

Its military capabilities are second only to the US and are expanding and upgrading rapidly. It is likely to be the leading Asian military power but will not have the global military reach of the US with the latter’s network of military bases and military allies across all geographies. China has made impressive progress in sophisticated technologies, including Artificial Intelligence, but the five global high-tech companies — Microsoft, Google, Amazon, Meta and Apple — are all American. Therefore, the BRI is only one instrument in the array of markers that determine untrammelled hegemony, and China does not yet make it on more important counts. But we are still in the first quarter of the current century. Could China beat the odds in the coming years? One should not exclude that possibility based on its setbacks on the BRI front.

 

Mr Lintner is on much surer ground in his critique of BRI projects in several Asian, African and Latin American countries. He points to certain common flaws in the design of BRI projects. The Chinese assume that just as in their own country, the building of infrastructure in the shape of roads, rails and power supply will automatically lead to an expansion in economic activities and rise in incomes. But this is not necessarily true in developing countries where even the basic ecosystem for expanding economic activity may not exist, for example, in terms of skilled labour, governance system and efficient markets.

 

Infrastructure created with loans provided by Chinese development and policy banks carry a relatively high rate of interest. Most projects do not generate enough revenue to enable the repayment of loan and interest. Mr Lintner cites a whole array of projects that have created infrastructure in developing countries but not of a kind that also generates higher incomes. The Hambantota port and airport project in Sri Lanka is a classic example. He is also right that 10 years on since BRI was announced by Chinese President Xi Jinping, most recipient and potential target countries have become much more wary about joining. For example, Nepal is a BRI partner and several major projects have been announced. But the Pokhara airport project has had major cost-overruns. There are reports of large-scale corruption and no international flights are using the airport, not even Chinese airlines. In Pakistan, local insurgencies and misgovernance have stalled several projects under the much-vaunted China-Pakistan economic corridor, which was once declared to be the flagship project of the BRI. But as Mr Lintner himself points out, the Chinese are also learning from their experience and adjusting the BRI to make it more viable. The new stress on small and community projects is one such shift in focus.

 

Mr Lintner’s book is a very good critique of the BRI as it has unfolded in the developing world. It is granular in its analysis and reflects the author’s familiarity with Asia. But China’s quest to emerge as the number one power in this century is still in play.

 

The reviewer is a former foreign secretary