(In)Vested Interest - China's Belt and Road Initiative (original) (raw)
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Why did China acquire equity returns at ports in Sri Lanka and Djibouti at this particular moment? I argue that Beijing’s previous actions of forgiving foreign debt made sense during the period of China’s rise, which depended on natural resource imports for export manufacturing and political support from foreign countries. However, during today’s period of China’s peak, acquiring ports in Sri Lanka and Djibouti can be explained by three crucial factors: (1) the falling rate of profitability; (2) China’s behavior under Xi Jinping’s leadership; (3) and the emergence of the Belt & Road Initiative. I examine and compare China’s foreign acquisitions in Sri Lanka and Djibouti. And finally, I draw out the key lessons from China’s engagements with both states to examine what it means for the Philippines.
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China’s Engagement with Smaller South Asian Countries
U.S. Institute of Peace, 2019
When the government of Sri Lanka transferred operations of Hambantota port to a Chinese majority-held joint venture for 99 years, this event heightened concerns about China’s presence in the smaller countries of South Asia (Bangladesh, Sri Lanka, Nepal, Bhutan, and Maldives). Some commentators have suggested that Sri Lanka, as well as other South Asian nations that have funded major infrastructure projects through China’s Belt and Road Initiative, are victims of “China’s debt-trap diplomacy.” This report finds that the reality is much more complicated.
NYU JOURNAL OF INTERNATIONAL LAW AND POLITICS, 2019
Since China Merchant Port Holdings and Sri Lanka signed a 99-year Concession Agreement for the 15,000 acres of Hambantota Port in Sri Lanka in 2017 as part of the Belt and Road Initiative (BRI), media outlets and academics have used the agreement as a proof of China’s new interventionist and expansionist attitude, realized through debt-trap diplomacy. China has a reputation as the stronghold of Westphalia sovereignty. However, the BRI and increased Chinese investments abroad may modify its attitude toward sovereignty. In protecting its interests and its nationals abroad, is China adopting similar legal regimes and techniques to those adopted by Western powers in the nineteenth and twentieth centuries— or is China taking a different path? This article, using local media reports and interviews of important stakeholders, looks at the available sections of the Concession Agreement of Hambantota Port and contextualizes the agreement in light of international law and evolving Chinese conceptions of sovereignty. It argues that China, relying on the contested and political notion of sovereignty, is using similar legal techniques as Western powers used since the nineteenth century, and that its understanding of sovereignty continues to be malleable in order to accommodate new evolving interests.
The Challenges of Post-war Development in Asia and Africa
Hedging against its potential exclusion from the Trans-Pacific Partnership and other mega trading agreements, China embarked on its 21st Century Maritime Silk Road agenda to generate growth through supply chain integration and infrastructure construction in South Asian economies. However, the characteristics of China’s business-led and elite-oriented overseas development practices created policy gaps in high-risk countries. Based on interviews and fieldwork focused on Chinese State-Owned-Enterprises (SOEs) in Sri Lanka, this paper explores how globalization changed the nature of these SOEs: from policy executor to both policy maker and market actor in host countries and in China. However, these changes in nature and influence of key Chinese economic actors in host countries are actually not reflected by, and are in fact out of step with, the 1994 regulation that lays down the principle of non-interventionism in foreign assistance. Such a mismatch between expansionist business and restrained regulation leads to a new paradigm where businesses, especially SOEs, serve as a bridge between the host country and Beijing to identify areas where business interest and development needs intersect, thereby shaping development financing distribution in a way that facilitates SOEs’ ascension of the global value chain. However, the exclusion of the local private sector from expressing the most pressing needs makes the new paradigm insufficient to integrate the local supply chain. This, in turn, implies the new paradigm is less able to address debt sustainability problems, and geopolitical and ethnic tension in high-risk regions. In order to redress this imbalance, this paper proposes the inclusion of the private sector and civil society into China’s mainly business-led overseas development paradigm.
Copyrights belong to Center for Poverty Analysis, publication in progress with Stability, International Journal for Security and Development Hedging against its potential exclusion from Trans-Pacific Partnership and other mega trading agreements, China embarked on its 21st Century Maritime Silk Road agenda to generate domestic growth through supply chain integration and infrastructure construction in South Asian economies. However, the characteristics of China’s business-led and elite-oriented overseas development policies created policy gaps in high-risk yet strategically important countries. Based on interviews and fieldwork focused on Chinese State-Owned-Enterprises (SOEs) in Sri Lanka and Myanmar, this paper explores how globalization changed the nature of these SOEs from policy executors to both policy makers and market actors in host countries as well as in China. However these changes in nature and influence of key Chinese economic actors is actually not reflected by and is in fact out of step with the 1994 regulation that lays down the principle of non-interventionism in foreign assistance. Such features combine to generate a new paradigm in China’s foreign assistance where businesses, especially SOEs, serve as a bridge for governments in countries like Sri Lanka and Myanmar. In reality, the market-oriented nature of China’s aid executors, the principle of non-interventionism and the domestic economic and political structure in host countries together shape the nature of China’s aid projects in South Asia so that it does not solve the fundamental challenge of globalization, namely the increasing disparity of wealth distribution between labor and capital. This, in turn, implies that Chinese aid is less able to contribute to reducing geopolitical and ethnic tension in high risk regions. In order to redress this imbalance, this paper proposes the inclusion of the private sector and civil society into China’s mainly business-led overseas development paradigm, which can also contribute to augmenting the twin-track OECD-DAC led global aid structure. Key Words: Aid, China, State-Owned-Enterprises, Paris Declaration on Aid Effectiveness, International Cooperation, Aid for Trade