China Dream

How China's Belt And Road Became A Global Trail Of Trouble
By Wade Shepard

Sri Lanka's most corrupted President Mahinda Rajapaksa Mahinda Rajapaksa, the Chinese Ambassador to Sri Lanka Cheng Xueyuan and attendees look at a proposed construction model of Port City during an event to officially declare the 269 hectares of land reclaimed from the sea for the project as part of the capital Colombo on December 7, 2019.

China’s Belt and Road initiative (BRI), a network of enhanced overland and maritime trade routes better linking China with Asia, Europe and Africa began in 2013 with much fanfare and hope. Upwards of a trillion dollars were being put on the table to boost economic development in globalization’s final frontiers, Asia and Africa’s infrastructure gap was to be lessened, and the world’s second largest economy was taking more of an active role in international affairs with the prospect of creating a true multi-polar global power structure. 

With catchphrases like “a rising tide lifts all ships,” China stepped beyond its borders to an extent that hasn’t been seen for centuries—perhaps ever—and was welcomed by many emerging markets with open arms.
But today, nearly seven years since the Belt and Road began, the story is much different, as Chinese investment has become a euphemism for wasteful spending, environmental destruction and untenable debt. 

Many major projects are currently strewn around the world in half-finished disrepair and the opportunities that were sold to local populations rarely materialized. 

All up and down the Belt and Road, projects have been marred by delays, financial implosions and violent outpourings of negative public sentiment.
In the initial stages of the Belt and Road, it seemed as if China was trying to rewrite the book on international development. 

The projects were bigger, more costly, and riskier than what the world was used to seeing, which created a buzz and sense of excitement: could China step up onto the global stage and show us how it’s done? 

While the news tickers sparkled with headlines of multi-billion dollar deals, big moves, and action along the Belt and Road, a broader view would have shown that a large portion of these deals were being made with countries that had credit ratings classified as “junk.” 

Making big deals with countries like Pakistan, Sri Lanka and Malaysia showed the initial propensity of the Belt and Road to shoot for quantity over quality, expediency over transparency—and the reactions from this strategy was quickly felt across the entire network.
It was in Sri Lanka that the deficiencies of China’s international development activities were first revealed globally. 

China partnered with Sri Lanka’s most corrupted president, Mahinda Rajapaksa, who now faces allegations of financial irregularities, to build a series of infrastructure mega-projects in Hambantota, a vastly undeveloped region on the island nation’s southern coast. 

To start, the plan called for a new deep sea port, an airport, a stadium, a giant conference center and many miles of new roadways. 

These projects were mostly funded with loans from China, which a few years later Sri Lanka struggled to pay back, as the country sunk into a debt trap of its own making.
China eventually seized a 70% share of the deep sea port at Hambantota for 99 years for $1.12 billion. 

While this at first appeared to be a debt-for-equity swap, news later came out that Sri Lanka actually used the money to beef up its foreign reserves and make some other foreign debt repayments to save itself from economic collapse. 

However, the optics on the situation were entirely unhelpful, with headlines like “How China Got Sri Lanka to Cough Up a Port” echoed across media sources around the world as the “Chinese debt trap diplomacy” theory was born.
The Hambantota fiasco put a black mark on the Belt and Road’s financing strategies and served as a warning for emerging markets looking to make similar deals with China. 

Bangladesh, Malaysia, Myanmar, Pakistan and Sierra Leone have all subsequently decided to cancel or downsize some of their Belt and Road projects over concerns of ending up like Sri Lanka. 

China’s bags of money, which emerging markets were ogling over in the early days of the Belt and Road, seem to have lost a touch of their luster.

Chinese dictator Xi Jinping speaks with Sri Lanka's most corrupted President Mahinda Rajapaksa.

“As Chinese companies push deeper into emerging markets, inadequate enforcement and poor business practices are turning the BRI into a global trail of trouble,” wrote Jonathan Hillman of the Center for Strategic and International Studies. 

“A long list of Chinese companies have been debarred from the World Bank and other multilateral development banks for fraud and corruption, which covers everything from inflating costs to giving bribes.”
When the Belt and Road was first announced, Malaysian Prime Minister Najib Razak welcomed the initiative, and China quickly became the top source of FDI in Malaysia. 

According to the World Bank, between 2010 and 2016 nearly $36 billion was pumped into Malaysia by Chinese state-owned firms. 

Multiple big ticket infrastructure projects—including the East Coast Rail Link project and a massive port city called Melaka Gateway—were started, Chinese firms bought up multiple Malaysian ports, and bonafide mega-projects, such as the $100 billion, 250,000+ person Forest City, were being built with Chinese direction and financial backing.
Then came the problems. 

News of the 1MDB and other scandals connected with the prime minister came out, as it was discovered that over $7.5 billion of government money had disappeared. 

Via Belt and Road projects, China had a role in trying to help the embattled prime minister cover evidence of financial irregularities by artificially inflating the costs of infrastructure projects so the excess could be available for other uses. 

This favor came with a catch, however, as Malaysia was to give Chinese companies big stakes in national railway and pipeline projects and permission for the Chinese navy to use two Malaysian ports. 

This deal didn’t come to pass, but it yet again cast the Belt and Road in a dubious light.
There are many other examples of parties from China allegations of corruption up and down the Belt and Road. 

Bangladesh shut down a highway project that was supposed to have been built by the China Harbour Engineering Company due to the company reputedly offering a Bangladeshi official a bribe, Chinese development funds were reportedly allocated for Rajapaksa’s ill-fated reelection campaign, Chinese tech giants Huawei and ZTE have been probed for wrongdoing in numerous BRI countries, and the U.S. arrested the emissary of China’s CEFC Energy Company for illicit payments to officials in Chad and Uganda. 

A 2017 McKinsey survey found that between 60% to 80% of Chinese companies in Africa admitted to paying bribes and, almost needless to say, in the latest Transparency International Bribe Payers Index, Chinese firms scored second to last.At this point, it is clear that the BRI does not keep good company. 

In addition to most Belt and Road countries having poor debt ratings, they also tend not to fare so well in international corruption indexes. 

According to the TRACE Bribery Risk Matrix, 10 Belt and Road countries were deemed to be among the countries most at risk to bribery.
While the lack of transparency and oversight as to what China is doing abroad was a boon in the early days of the Belt and Road, the initiative has lost support amid the scandals, debt traps and failed projects that have emerged in recent years. 

Countries along the corridors are now operating with far more caution and scrutiny, pumping the breaks on many projects and potentially setting the BRI back for years to come.

China's Debt Traps

China's ambition dealt blow ahead of G20 as Tanzania and Kenya projects grind to halt

By Sophia Yan

The hopes of China’s dictator Xi Jinping to play a more assertive role on the world stage were under pressure on Thursday as he headed to the G20 summit amid a trade war with the US and blows to his flagship Belt and Road Initiative (BRI).
Eleven, who has reversed years of foreign policy caution, landed in Osaka amid reports that Tanzania had suspended a port project and Kenya halted construction on a coal power plant, dealing a major blow to Beijing’s ambitions in Africa.
The port in the Tanzanian town of Bagamoyo was worth $10bn and would have been the largest in east Africa.
But financing terms presented by the Chinese were “exploitative and awkward,” said John Magufuli, Tanzania’s president.
“They want us to give them a guarantee of 33 years and a lease of 99 years, and we should not question whoever comes to invest there once the port is operational,” said Mr Magufuli. 

“They want to take the land as their own but we have to compensate them for drilling construction of that port.” When Xi launched the BRI in 2013, developing nations enthusiastically signed on for loans to fund big projects that would set them on the path to prosperity. 

But six years on new governments are starting to cancel and renegotiate contracts given the weight of Chinese debt, casting doubt on the $1 trillion initiative set to inaugurate a new ‘Silk Road’.

Sri Lanka’s Hambantota port was a cautionary tale for many. 

After the country struggled to pay up on billions in debt, Beijing used hardball tactics to acquire a 99 year lease to the port in exchange for loan forgiveness.
The case was a stunning example of what critics had long feared – that the Belt and Road project amounted to a debt trap for weak countries around the world. 

It sparked worries China would again leverage similar defaults elsewhere to acquire key infrastructure assets; last year, the Zambian government even had to deny rumours it was planning to hand over control of major public assets.
On Wednesday a court in Kenya also halted plans for the construction of a $2 billion Chinese-backed coal power plant near the island town of Lamu, a UNESCO World Heritage site famed for its twisting alleyways and stunning coastline.
The plant, which activists say would have increased Kenya's greenhouse gas emissions by 700 percent, was cancelled after judges ruled the environmental assessment was inadequate.
Other African projects, including massive rail construction projects in Ethiopia and Kenya, have also come under scrutiny, leading China to write-off some loans.
Meanwhile Beijing is facing enormous protests in Hong Kong against a law that would extradite suspects to face trial in the mainland, where the Communist Party controls the courts. 

On Thursday hundreds of protesters in Hong Kong rallied outside the offices of the justice secretary, blocking roads as they called for the extradition bill to be dropped for good. 

Carrie Lam, the city’s chief executive, suspended it indefinitely after one million residents took to the streets decrying a power grab by Beijing.
The protesters have appealed for world powers to raise the plight of Hong Kong at the G20, although Chinese officials have already warned they will not discuss the matter.
Instead, Xi is slated to meet Donald Trump on Saturday as the US demands economic reform in return for the lifting of tariffs on roughly $200 billion of Chinese goods.
Mr Trump, officials said, was hopeful for some kind of accord as his 2020 re-election hopes hinge on a strong economy.
According to the Wall Street Journal, Xi will request that the US end its block on the sale of US technology to Huawei, and drop the demand for Beijing to buy even more American exports than it agreed to when the sides met in December.
Analysts doubted the G20 would see an end to the dispute. 

On Wednesday Mr Trump said he was happy with the status quo. 

“They want a deal more than I do,” he told Fox News.

Will Balochistan Blow Up China’s Belt and Road?

Violence in the Pakistani province is on the rise—and now Chinese are the target.
BY MUHAMMAD AKBAR NOTEZAI
Pakistani naval personnel stand guard near a ship at the Gwadar port on Nov. 13, 2016. 

Freedom fighters: The Balochistan Liberation Army (BLA) released a video warning China to stop aiding Pakistan to brutally suppress Baloch people.

In 2015, when Chinese dictator Xi Jinping’s plane entered Pakistani airspace, eight Pakistan Air Force jets scrambled to escort it. 

The country’s leadership warmly welcomed the Chinese leader—and his money. 

On his two-day state visit, he announced a multibillion-dollar project called the China-Pakistan Economic Corridor (CPEC), which would form part of China’s Belt and Road Initiative and would revolve around the development of a huge port in the city of Gwadar.
Gwadar, a formerly isolated city in Pakistan’s southwestern Balochistan province, boomed. 

As soon as the CPEC was announced, tourists, including journalists, started visiting Gwadar. 

The Pearl Continental, the only five-star hotel in the area, had been on the brink of closure. 

Now guests thronged. 

But not everyone was happy about that. 

Baloch nationalists and underground organizations opposed the CPEC from the beginning, on the grounds that it would turn the Baloch people into a minority in their own province. 

They threatened attacks on any CPEC project anywhere in Balochistan.
There was plenty of reason to believe their threats. 

During the tenure of Pakistani President Pervez Musharraf, who led Pakistan from 1999 to 2008, Baloch insurgents killed Chinese engineers and workers in the province. 

One of the incidents took place in Gwadar, where in May 2004, militants killed three Chinese engineers. 

The engineers had been driving to work. 

When they slowed down to pass over a speed bump, a terrorist in a nearby car detonated the barrier with a remote control.
In recent years, violence had waned. 

There were no new projects, and the city seemed to have settled into its own rhythm. 

But following the CPEC announcement, according to the News International, a Pakistani English daily, Pakistan deployed a total of 17,177 security personnel from the Army and other security forces to ensure the security of Chinese nationals. 

In the years since, Gwadar has become something of a military cantonment. 

Army, police, and other law enforcers mill about.
And locals traveling around Gwadar face routine harassment at security checkpoints.
The policing has done little to deter attacks. 

In recent months, two reported incidents have put the province on edge. 

The first attack occurred on April 18, when 15 to 20 Baloch insurgents dressed in military uniforms forms forced 14 passengers off a public bus and shot them, one by one. 

Most of victims were from the Pakistan Navy and Coast Guards, whom Baloch insurgents view as an occupying force.
Then, on May 11, the Pearl Continental in the heart of Gwadar came under fire. 

Situated on a promontory overlooking the port and the Arabian Sea, the hotel is mammoth and a favorite of foreign dignitaries. 

Security there is intense, and since it is near Gwadar’s port area there are already plenty of military personnel in the area. 

Three armed attackers from the Balochistan Liberation Army’s Majeed Brigade nevertheless managed to breach the defenses and open fire on people inside. 

According to officials, five individuals—four hotel employees, including three security guards, and a navy officer—lost their lives.
The Pearl Continental attack in particular bodes ill for Chinese investment in Balochistan.
Before this month, it was hard to imagine that Baloch insurgents would be capable of carrying out the attack in the center of Gwadar, even with the local support. 

But now any sense of security has been undermined.
Established in 2011, the Majeed Brigade, a suicide attack squad within the Balochistan Liberation Army (BLA), is reportedly named after Abdul Majeed Baloch, who attempted to assassinate then-Prime Minister Zulfikar Ali Bhutto in 1974 in Balochistan. 

In 1973, Bhutto had ordered a military operation against the Baloch because Baloch insurgents had vowed war against the state of Pakistan after Islamabad had dismissed the democratically elected National Awami Party government in Balochistan in February 1973. 

The operation triggered a major insurgency in Balochistan that lasted until 1977. 

Majeed was killed by security forces before he could carry out his plan against Bhutto.
In the first several years after the BLA was formed in 2000, it mostly waged attacks on national security forces, state infrastructure, and Punjabi settlers. 

In more recent years, under Aslam Baloch, who died in Kandahar in December 2018, the Majeed Brigade has focused on Chinese nationals and Chinese-funded projects. 

Such attacks seemed more likely to provoke media attention. 

He tapped his oldest son, Rehan Baloch, for a suicide attack on Chinese engineers in Dalbandin, a city in Balochistan, last August. 

The attack resulted in minor injuries for the engineers. 

He also oversaw an attack on the Chinese consulate in Karachi a few months later. 

Two police officials and two visa applicants were killed.
As these incidents suggest, the Majeed Brigade is gaining momentum. 

And it is joined by new groups, such as the Baloch Raaji Aajoi Sangar, an alliance of Baloch separatist groups specifically focused on attacking CPEC projects. 

From the beginning, the Baloch have been pushed to the wall. 

They have never been treated as equal citizens of Pakistan, nor have they been given equal constitutional, economic, and political opportunities. 

This is why some Baloch protest peacefully, some do nothing, and some have taken up arms against the state.

Rogue Nation

Beware of China’s new colonialism
By Benedict Peters 

America is slowly awakening to the growing menace of China’s plans for economic supremacy.
In 2013 Chinese dictator Xi Jingping launched an international investment program that became known as the Belt and Road Initiative (BRI). 

Under a new mantra to connect the global economy, China began investing heavily in foreign infrastructure projects in over 60 countries that account for 60 percent of the world population and 30 percent of global gross domestic product.
From 2013 to 2018 China made an estimated nearly $614 billion worth of investments in countries participating in BRI. 

Morgan Stanley predicts China’s overall expense from BRI could reach $1.3 trillion over the next decade.
Xi considers BRI an opportunity to share China’s model for economic growth with the developing world. 

Geopolitical rivals are concerned BRI investment programs will deepen China’s political influence and military expansion.
Is BRI a lifeline for the developing world, or economic imperialism?
In Africa, it is clear that China’s campaign of foreign investment is a new form of colonialism. 

The continent, where I live and work, is ground zero.
When BRI launched in 2013, it prioritized regional development projects in Asia, the Middle East, Africa and Eastern Europe. 

Italy became the first major industrialized nation in the Group of Seven to join BRI, despite opposition from the U.S. and the European Union.
U.S. officials are right to be concerned about the expansion of an infrastructure network that leaves crippling debt, faulty construction and project mismanagement in its wake.
The Center for Global Development published a study of 23 countries participating in BRI and found 10 to 15 are in danger of debt distress. 

Other high-profile cases in Sri Lanka and Pakistan are examples where BRI projects left the local governments in severe debt and incentivized officials to appeal to China for debt forgiveness.
When countries fall deep enough into debt, China will offer to renegotiate the terms of the debt in exchange for strategic assets or preferential treatment.
Last November, Moody’s Investor Service warned that nations benefiting from BRI are at risk of losing control of strategically important infrastructure, natural resources and other important assets if they fail to pay back their Chinese creditors. 

This is a major concern in Africa, where Chinese financing paved the way for essential infrastructure projects.
When countries fall deep enough into debt, China will offer to renegotiate the terms of the debt in exchange for strategic assets or preferential treatment.
In 2015 China promised $60 billion in grants and commercial loans to finance economic development projects in Africa. 

African leaders were eager to accept the financial assistance and as a result, China holds 14 percent of sub-Saharan Africa’s total debt stock and is the largest owner of public debt in Africa.
Public financing programs can often be a useful tool for local governments to build projects that generate economic growth. 

But an over-reliance on Chinese financing is saddling Africa with greater debt, leaving the continent at a strategic disadvantage in the future.
Developing nations of the world are understandably attracted to China’s deep pockets and “no strings attached” political doctrine for infrastructure investment.
U.S. National Security Adviser John Bolton has called attention to China’s strategic push in Africa and around the globe, but the U.S. must do more to re-establish itself as an alternative to China.
More specifically, America must present developing nations with a viable alternative to BRI.
Congress bolstered the development finance capabilities of the U.S. through the BUILD Act, which authorized the creation of the U.S. International Development Finance Corporation (USDFC).
The USDFC will consolidate the existing U.S. development finance institutions and provide new investment capabilities and financial tools to promote U.S. investment in the developing world.
The timing of the BUILD Act could not be more appropriate. 

The financial downsides of BRI are coming to light, just as China’s expansion reached the United States’ doorstep with major investments in the Caribbean.
The USDFC will be operational in the coming months. 

The new agency has an opportunity to expand the footprint of U.S. investors by positioning America as a more attractive option for infrastructure investment support.
As a businessman working in all parts of Africa, I can assure you that business leaders in Africa are eager to partner with the U.S. to provide a better model for the developing world.
China is running a rampant campaign of new colonialism through the developing world. 

The U.S. must do something more to present a viable investment alternative for government leaders participating in BRI.
The American people and government policymakers are waking up to this growing problem. 

I just hope it is not too late.

Chinese Peril

China's Spreading Influence in Eastern Europe Worries West
Associated Press
In this photo taken Friday, March 1, 2019, a woman walks by Chinese flag placed on a street in Belgrade, Serbia.

BELGRADE, SERBIA — Coal-powered plants, mobile networks, major bridges, roads and railways: Chinese investments have been booming throughout Central and Eastern Europe's cash-strapped developing countries, even as European Union officials scramble to counter Beijing's mounting economic and political influence on the continent.
EU member Croatia is hosting a summit Thursday between China and 16 regional countries -- the 8th so far -- that focuses on expanding business and other links between China and the region, which Beijing sees as a gateway into Europe.
The gathering in Dubrovnik of the so-called 16+1 initiative consists of Central and Eastern European countries that have endorsed China's ambitious global "Belt and Road'' investment project, which has triggered concerns among some key EU states about increased Chinese political and economic clout in the region.
China has already invested billions of dollars in various infrastructure projects in Central and Eastern Europe. 

Western leaders worry that further investment in the states that are EU members -- or those hoping to join -- could mean lower environmental and other standards than those in the rest of the bloc.
Thorny issues include the flouting of EU competition rules, potential over-borrowing by some of the states, the quality of constructions, and security concerns over high-speed 5G network technology supplied by Chinese companies. 

Critics also say that in return for allowing Chinese expansion into the region, Beijing should give better reciprocal access for European companies to Chinese markets.
Top Chinese officials have sought to alleviate EU fears of unfair competition from Chinese state-controlled companies, which benefit from the government's financial backing. 

Chinese dictator Xi Jinping agreed during a recent visit to Paris to work with European leaders to seek fairer international trade rules.
French President Emmanuel Macron, Xi Jinping and European Commission President Jean-Claude Juncker hold a news conference with German Chancellor Angela Merkel at the Elysee presidential palace in Paris, France, March 26, 2019.

​Of the 16 participating countries -- Albania, Bosnia, Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Montenegro, Poland, Romania, Serbia, Slovakia, and Slovenia -- 11 are EU member states, and the remaining five want to join.
Beijing has marketed its expanding initiative as a way to give some of Europe's neediest countries a financial boost, helping them gain access to more trade and investment. 

That has been mostly welcomed by the Central and Eastern European nations.
Major Chinese-led infrastructure projects in the region include a planned high-speed railway from the Hungarian capital, Budapest, to Belgrade in neighboring Serbia. 

The line will link up with the Chinese-controlled port of Piraeus in Greece as an entry point for Chinese goods to Central and Eastern Europe.
The project has drawn scrutiny from the EU because Chinese state-owned banks would provide financing, and Chinese companies would supply technology and the actual building. 

That conflicts with EU rules requiring public works to be broken into segments small enough to attract multiple bidders.
Hungarian Prime Minister Viktor Orban, whose own government often has been criticized for anti-democratic policies, says Hungary's relations with China should be based on "mutual respect.''
Hungary last year did not sign an EU report criticizing China's human rights record and business policies.
In Serbia, an EU membership candidate, Chinese companies are building major bridges and highways. 

They are also constructing a large coal-powered electricity plant even as China is trying to curb pollution at home by implementing renewable energy projects and reducing the use of lignite, by far the most polluting fossil fuel.
Power grid stand against the residential and office buildings in Beijing as the capital of China is shrouded by mild pollution haze on June 5, 2017.

Serbian analyst Mijat Lakicevic said the strategically-located Balkan country situated between East and West is a perfect place where "China can realize its economic concept, the way it wants to enter (Eastern European) markets,'' without much concern over fair bidding processes or pollution standards.
Bosnia, a potential EU candidate, is at odds with the bloc over its decision to issue a public guarantee for a 600-million euro ($676 million) loan from China's Export-Import Bank to expand Bosnia's largest coal-fired power plant.
EU's energy watchdog has warned that the move could eventually harm Bosnia's bid to join the EU because the agreement violates EU's subsidy and environment rules. 

Enlargement Commissioner Johannes Hahn has said the issue "raises serious questions'' about the Balkan country's "commitment to international treaties (and) European rules.''
Chinese companies are also involved in the construction of a $380-million Peljesac bridge in Croatia, which links two coastal parts over the Adriatic Sea, as well as a highway linking the Adriatic in Montenegro to neighboring Serbia.
In the Czech Republic, the National Cyber and Information Security Agency followed U.S. authorities' warning against the use of hardware or software made by Chinese companies Huawei and ZTE. 

That, however, did not change Czech President Milos Zeman's positive stance toward Huawei.
Zeman publicly criticized the Czech watchdog, saying it harms the Czech Republic's business interests as it could affect Huawei's plan to invest $370 million in 5G networks in the Czech Republic.
U.S. officials mounted an international campaign to keep Huawei gear out of any foreign 5G network that might carry sensitive U.S. intelligence.

Chinese Peril

China is becoming an election issue in Asia. And that's bad news for Beijing
By James Griffiths

Hong Kong -- Two years ago, Indonesian President Joko Widodo -- also known as Jokowi -- stood shoulder to shoulder with Xi Jinping for a group photo to celebrate the Chinese leader's Belt and Road project.
Yet now, as Jokowi seeks re-election, he appears to be distancing himself from Beijing and downplaying the importance of Chinese-funded projects in Indonesia.
It's a pattern emerging across southeast Asia and beyond, and one that will be of great concern for Beijing as Chinese investment and ties become an awkward -- if not downright toxic -- election issue.
The growing skepticism over Xi's signature Belt and Road Initiative (BRI) risks exacerbating existing tensions many countries in the region have with Beijing over territorial disputes, as both China and the US continue to jockey for power amid a drawn-out trade war.

Vladimir Putin, Chinese dictator Xi Jinping, Indonesia's President Joko Widodo and other delegation heads pose for a group photo as they attend the Belt and Road Forum for International Cooperation at the Yanqi Lake venue on May 15, 2017, on the outskirts of Beijing, China.

Better deal
"It is not true if people think President Jokowi has special preference for China-funded projects," his spokesman Ace Hasan Syadzily said last week.
If Widodo's camp sounds defensive, it's because his ties to Beijing have become a key attack line for rival Prabowo Subianto.

After Jokowi undercut Prabowo's criticisms of him being not Muslim enough by selecting an Islamist cleric as his running mate, the retired general has gone hard after Chinese investments in Indonesia once touted by the President.

In January, Prabowo -- echoing US President Donald Trump -- vowed to get a "better deal" from Beijing, and called for Jakarta to review its trade policies with China.
Anwita Basu, an analyst at the Economist Intelligence Unit, said that "over the course of the campaign period, anti-China rhetoric has been on the rise."
"The Chinese community in Indonesia -- who have mainly been business owners and traders -- have long faced resentment and discrimination for controlling large amounts of wealth," she told CNN by email. 

"These issues are touted and popularized during election periods and this year, (Prabowo) has used them as a means to question Jokowi's loyalty to his own nation."
China is Indonesia's biggest trading partner by far, according to the World Bank. 

In the first two months of this year, trade between the two countries was worth more than $10.4 billion.
Under Jokowi, Indonesia has joined both the China-led Asian Infrastructure Investment Bank as well as Xi's BRI. 

The initiative has come under increasing criticism in recent months, amid claims it saddles poorer countries with unsustainable debts and projects that benefit Beijing more than host nations.
Beijing has funded major infrastructure projects in Indonesia, most notably a $6 billion high-speed railway linking Jakarta with the city of Bandung, the capital of West Java.
That project is due to be completed next year. 

But it has come under criticism for budget overruns, poor planning and construction delays. 

Even supporters of greater Chinese investment in Indonesia have turned on it -- Tom Lembong, the country's investment chief, told Bloomberg it "represents everything that's wrong with Belt and Road."
"It's opaque and non-transparent -- even us cabinet members are having trouble getting data and information," Lembong said.

Running on anti-China
While the Indonesian election still seems Jokowi's to lose, and a Prabowo presidency appears to be a long shot, recent history shows Beijing can little afford to be complacent.
Chinese investment and influence played a role in Malaysia's elections last year.
And while it was not the driving factor in Mahathir Mohamad's upset victory in May, the 93-year-old has followed through on promises to be tougher on Beijing since becoming President.
Nor were such concerns limited to the Malaysian election.
During a poll in the Maldives last year, incumbent and eventual loser Abdulla Yameen was repeatedly attacked over his close ties to Beijing.
In January 2018, former President Mohamed Nasheed accused Yameen of allowing China to stage a "land grab" in the country. 
After his Maldivian Democratic Party took power, it pledged to end "China's colonialism" and renegotiate loans with Beijing.
Other countries, such as Myanmar, have scaled back BRI projects amid concerns over debt and sustainability.
Beyond Asia, Kenyan President Uhuru Kenyatta faced claims that a key port in Mombasa was at risk of being seized by Beijing over unpaid debts.
The public relations storm was sparked by an actual move by China to take over Sri Lanka's Hambantota port, after the country could not pay back the billions of dollars it owed Beijing.

Losing its sheen
As China prepares for a key Belt and Road summit later this month, there are signs Beijing is looking to overhaul the initiative in an attempt to address some of its most pressing issues and defuse criticisms from foreign partners.
While she felt the backlash against China in countries such as Indonesia and Malaysia was outweighed by others like the Philippines moving closer to Beijing, EIU analyst Basu predicted "many countries will remain cautious over the lack of transparency in the terms of funding offered" for BRI deals.
The backlash against BRI, which appears to have caught Chinese leaders off guard, has highlighted that beyond investment, Beijing has little to offer its neighbors -- many of which are either neutral or opposed to it on key foreign policy issues.
"China's increasingly assertive policy in the South China Sea since 2009 has reinforced concerns about whether the country's rise will continue to be peaceful, especially in light of Beijing's perceived role in undermining Asean unity," Jakarta-based political analyst Dewi Fortuna Anwar wrote last month.
Both Indonesia and Malaysia have territorial disputes with China, and in December Jokowi oversaw the opening of a military base on the Natuna Islands at the southern tip of the South China Sea. Malaysia too has expressed concern over Beijing's sprawling claims in the disputed waters.
Governments in the two Muslim-majority countries are also facing increasing pressure to stand up to China over its treatment of the Uyghur minority, hundreds of thousands of whom have been sent to "re-education" camps amid a wider crackdown on Islam.
As it attempts to balance an increasingly hostile US -- and ward off the ill effects of a temporarily paused trade war with Washington -- China is finding that its traditional methods of winning friends in Asia is losing its sheen.
And the closer it gets to superpower status, the more its influence and power can be used against it.

Chinese Peril

In Central Asia’s forbidding highlands, a quiet newcomer: Chinese troops
By Gerry Shih

Hundreds of Chinese troops have been posted for three years at an outpost near Tajikistan’s border with Afghanistan. 

NEAR SHAYMAK, Tajikistan — Two miles above sea level in the inhospitable highlands of Central Asia, there’s a new power watching over an old passage into Afghanistan: China.
For at least three years, Chinese troops have quietly monitored this choke point in Tajikistan just beyond China’s western frontier, according to interviews, analysis of satellite images and photographs, and firsthand observations by a Washington Post journalist.
While veiled in secrecy, the outpost of about two dozen buildings and lookout towers illustrates how the footprint of Chinese hard power has been expanding alongside the country’s swelling economic reach.
Tajikistan — awash in Chinese investment — joins the list of Chinese military sites that includes Djibouti in the strategic Horn of Africa and man-made islands in the South China Sea, in the heart of Southeast Asia.
Meanwhile, Chinese dictator Xi Jinping’s economic ambitions over the past seven years have brought a wave of major investment projects, from the resource-rich Caspian Sea to Cambodia’s coastline.
The modest facility in Tajikistan — which offers a springboard into Afghanistan’s Wakhan Corridor a few miles away — has not been publicly acknowledged by any government.
But its presence is rich in significance and symbolism.
At a moment when the United States might consider a pact that would pull American troops out of Afghanistan, China is tiptoeing into a volatile region critical to its security and its continental ambitions.

Already, the retreat of old powers and arrival of the new are on display in Tajikistan, a tiny, impoverished country that served as a gateway into Afghanistan for U.S. units in the early phases of the 2001 invasion.
During a recent trip along the Tajikistan-Afghanistan border, The Post saw one of the military compounds and encountered a group of uniformed Chinese troops shopping in a Tajik town, the nearest market to their base. 

They bore the collar insignia of a unit from East Turkestan, the Chinese colony where authorities have detained an estimated 1 million Uighurs, a mostly Muslim ethnic minority.
The crackdowns against the Uighurs have been internationally condemned as a violation of human rights.
“We’ve been here three, four years,” a soldier who gave his surname as Ma said in a brief conversation while his Chinese comrades, guided by a Tajik interpreter, bought snacks and topped up their mobile SIM cards in Murghab, a sprawl of low-rises about 85 miles north of the base.
When asked whether his unit had intercepted anyone crossing from Afghanistan, Ma smiled.
“You should be aware of our government’s policies about secrecy,” he said. 

“But I can say: It’s been pretty quiet.”

Scarce public information
Details about China’s activities at the facilities, some of which bear the Chinese and Tajik emblems, are not made public. 

Also unclear are the arrangements over their funding, construction and ownership. 

Satellite imagery shows what appear to be two clusters of buildings, barracks and training grounds, about 10 miles apart near the mouth of the Wakhan Corridor, a narrow strip of territory in northeastern Afghanistan.

A Chinese soldier with the surname Ma buys goods in the Murghab bazaar. He told The Post that Chinese forces have been in Tajikistan for three to four years. 

The Post separately spoke to members of a German mountaineering expedition who said they were interrogated in 2016 by Chinese troops patrolling the Afghan corridor, near the settlement of Baza’i Gonbad. 

Photos provided by Steffan Graupner, the expedition leader, showed Chinese mine-resistant armored vehicles and equipment embossed with the country’s paramilitary logo. 

Taken together, the findings add weight to a growing number of reports that China, despite public denials, has been conducting security operations inside Afghanistan.
China’s Foreign Ministry declined to comment and directed questions to the Defense Ministry, which did not respond to requests for comment.
In a statement, Tajikistan’s Foreign Ministry said there are “no People’s Republic of China military bases on the territory of the Republic of Tajikistan,” nor “any talks whatsoever” to establish one.
Analysts say the Chinese encountered by The Post may be paramilitary units under the command of the central military leadership but technically distinct from the People’s Liberation Army, China’s main war-fighting force.
U.S. officials say they are aware of the Chinese deployment but do not have a clear understanding of its operations. 

They say they do not object to the Chinese presence because the United States also believes that a porous ­Afghan-Tajik border could pose a security risk.

A satellite view of one of the Chinese outposts at the border between Tajikistan and Afghanistan on Sept. 29.

Despite harboring concerns about militants in Afghanistan for decades, China has been loath to be seen as siding with any party in the conflict, much less to put boots on the ground.
Instead, China’s state-owned companies and banks have inked infrastructure deals, mining concessions and loans across Central and South Asia, the poor and turbulent belt that makes up its backyard. 

Its diplomats, who have robust ties with Afghanistan, Pakistan and the Taliban, have talked up China’s role as a regional peace broker — never a peacekeeper.
But China’s global posture is changing under Xi, who has shed the country’s long-standing isolationism and spoken loftily about restoring its great-power status.
People’s Liberation Army (PLA) strategists increasingly advocate for pushing beyond the Chinese mainland with deployments that follow in the wake of the country’s expanding “haiwailiyi,” or interests abroad, said Andrew Scobell, a Chinese security expert at the Rand Corp.
“China’s peaceful rise has encountered a complicated and severe situation,” Maj. Li Dong wrote in a 2016 journal article as part of a PLA assessment of China’s overseas military strategy. 

He pinpointed the Central Asian frontier as one of three top flash points along with the Korean Peninsula and the East and South China seas.
China’s deployments abroad lack strength and “flexibility,” Li wrote. 

“China should push the construction of its overseas military presence gradually.”

A rugged chessboard
In 2017, China unveiled a naval base in Djibouti that gave it a foothold in the Middle East and Africa. It steadily installed infrastructure — and later, weaponry — in the contested South China Sea. 

A recent Pentagon report predicted a PLA base could appear soon in Pakistan — a prospect China has denied.

Chinese troops visit the Murghab bazaar. 

Beijing’s moves have been similarly opaque in the rugged mountains spanning Tajikistan, Afghanistan, Pakistan and China: the same chessboard where czarist Russia and the British Empire vied for influence 150 years ago.
There will be “no Chinese military personnel of any kind on Afghan soil at any time,” Col. Wu Qian, the Defense Ministry’s spokesman, told reporters in August.
In private, the Chinese tell a slightly different story.
In late 2017, the Development Research Center, an influential think tank under China’s cabinet, invited a handful of Russian researchers to its central Beijing offices. 

In what was billed as a private seminar, the Chinese explained why China had a security presence in Tajikistan that extended into the Afghans’ Wakhan Corridor, according to Alexander Gabuev of the Carnegie Moscow Center, a Russian participant.
The Chinese researchers took pains to describe the outpost as built for training and logistical purposes — not a military occupation. 

They also sought to gauge Russia’s reaction with questions: How would Moscow view China’s move into its traditional sphere of influence? 

Would it be more palatable if China deployed private mercenaries instead of uniformed men?
“They wanted to know what Russia’s red lines were,” said Gabuev, who has held similar conversations with scholars working under the Chinese intelligence agency. 

“They don’t want Russia blindsided.”
In the 1990s, a Uighur separatist group, calling itself the East Turkestan Independence Movement, rose in Afghanistan under the protection of the Taliban and threatened attacks against China. Although Western officials and analysts question the ETIM’s ability to carry out significant attacks, it heralded the beginning of an extremist threat facing China.
Since 2014, hundreds of Uighurs have left China for Syria, and Chinese officials, like their Western counterparts, have warned about the prospect of fighters there decamping for Central Asia as they lose territory. 

In 2016, the Chinese Embassy in Kyrgyzstan was targeted in a suicide bombing that Kyrgyz authorities attributed to the al-Nusra Front in Syria.

'You never saw us here'
To make the days-long overland journey across Tajikistan, from the capital, Dushanbe, to the remote canyon held by Chinese soldiers, is to witness a landscape altered by an even more irrepressible force than the troops: Chinese money.
In the west, Chinese-built coal-fired plants loom over the skyline, providing electricity and heat to the capital’s residents. 

In the east, Chinese-funded hospitals and schools rise from the hardscrabble countryside. 

In the south, Chinese-financed tracks circumvent a crucial Soviet-era railway that had been shut down by Tajikistan’s neighbor, Uzbekistan. 

Stitching it all together are Chinese-bored tunnels and ­Chinese-laid asphalt that cut hours off trips along the country’s winding east-west highway.

Murghab, established as an army outpost in the 1890s by Russian Cossacks, is about 85 miles north of the remote Chinese border outpost. 

The projects reflect Tajikistan’s strategic position in China’s Belt and Road Initiative, or BRI, an ambitious infrastructure investment plan to pull the Eurasian land mass into its economic embrace. China, through a single state bank, held more than half of Tajikistan’s external debt as of 2016, up from none in 2006, according to 2017 Tajik Finance Ministry data.
In the soft-power stakes, the United States and Russia both appear to be losing relative ground to China, which provides scholarships for undergraduate Tajiks and military academy training for up-and-coming defense officials.
Susan M. Elliott, former U.S. ambassador to Tajikistan, said China’s generous aid and funding should be applauded but viewed with skepticism. 

In the past year, a handful of countries that have taken Chinese investments have reconsidered BRI deals amid allegations of corruption and low feasibility.
“If someone’s offering money to build roads and help put power lines up, it’s hard to turn that down when you have no alternative,” Elliott said. 

“This is a strategic and important part of the world, and we need to continue our strong partnerships with Tajikistan and other countries in the region.”
In many ways, the shifting geopolitical currents play out on the windy streets of Murghab, established as an army outpost in the 1890s by Russian Cossacks.
These days, it is Chinese troops who are dropping by in their unassuming minivans to pick up provisions.
Aiperi Bainazarova, a part-time manager at the only hotel in town, said locals believed there were hundreds of Chinese troops who stayed on base. 

They mostly come to town to buy phone credit. 

Sometimes they buy hundreds of kilograms of yak meat at the price of 30 somoni — about $3 — a kilo, she said.
“It helps the economy,” said Bainazarova, 21, an ethnic Kyrgyz who studied on a Chinese government scholarship in Shanghai.
Despite the Chinese government’s insistence on keeping things secret, its troops’ periodic visits to Murghab’s bazaar, a row of shipping containers converted into storefronts, are anything but.

Safarmo Toshmamadov is a shopkeeper in Murghab. Some of her customers are Chinese troops. 

Safarmo Toshmamadov, a 53-year-old ethnic Pamir shopkeeper, said they have come to her for maybe three years. 

Some attempt a few words of Russian — although they always come accompanied by Tajik interpreters, she said.
“We don’t think about them, and they don’t bother us,” Toshmamadov said, shrugging. 

“They buy my water and snacks. It’s good.”
One afternoon outside Toshmamadov’s store, a Post reporter saw Ma, the Chinese soldier, who was initially surprised to encounter another Chinese speaker.
He spoke guardedly but affably about his deployment, which he explained was secret.
“You should know our government’s standard policies around revealing information,” he said. 

“So don’t tell your friends.”
When asked to pose for a photo together, Ma recoiled.
“Remember,” he said, walking away. 

“You never saw us here.”

China's Era of Debt-Trap Diplomacy May Pave the Way for Something Sinister

Beijing cannot bend history to its will, but it will try.

By Patrick Mendis and Joey Wang

The key enabler that has allowed Beijing to protect its sovereign claims and project its power has been China’s explosive economic growth. 

As it cools, however, major programs such as the BRI will be critical to any future projection of power. 

As envisioned, the purpose of BRI is to “promote regional economic cooperation, strengthen exchanges and mutual learning between different civilizations, and promote world peace and development.” 

Behind this heady mixture of material, economic, and cultural aspirations, however, there are other hidden motivations not likely to be mentioned in official Chinese literature.
First, China also wants to decrease the dependence on its domestic infrastructure investment and begin moving investments overseas to address the capacity overhang within China. 

It should not come as an astonishment that the key instrument of this investment transfer comes with the Chinese system of “state capitalism,” which has further been solidified by Xi Jinping. 

Among the BRI infrastructure development projects, Chinese companies accounted for 89 percent of the contractors, according to a five-year analysis of BRI projects by the Center for Strategic and International Studies in Washington.
BRI also parallels numerous regional economic and infrastructure development initiatives such as the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), the Ayeyarwady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS), and the Regional Comprehensive Economic Partnership (RCEP). 

As the country with the deepest pockets, a number of these member-countries have found Chinese capital too attractive to resist. 

Chairing the BIMSTEC this year, Sri Lanka, for example, now finds itself granting China a ninety-nine-year lease at the Hambantota Port as well as approximately fifteen thousand acres of land nearby for an industrial zone to help pay for part of the $1.1 billion it owes China. 

Laos and Cambodia—members of ACMECS—are so indebted to China that Australia’s former Foreign Minister Gareth Evans has purportedly opined that they have become “wholly owned subsidiaries of China.” 

Some countries have now learned from the Sri Lanka experience and have recognized that the costs far outweigh the benefits. 

Bangladesh, for instance, has declined Chinese funding for the much needed “the twenty kilometers-long rail and road bridges over Padma river” and has instead opted to “self-generated funds.” Thailand, under ACMECS, is also working to create a regional infrastructure fund to reduce reliance on China and avoid what has generally been called China’s “debt-trap diplomacy.”
Even outside the immediate domain of the BRI, China is using its wealth to isolate Taiwan diplomatically. 

In Latin America , China peeled away El Salvador in August after peeling away the Dominican Republic in May 2018. 

With growing Chinese influence in Africa, Swaziland—a tiny landlocked country— remains the only African country to recognize Taiwan after Burkina Faso established diplomatic relations with Beijing in May 2018.
China is also expanding its presence and engagement in the Caribbean with capital investments and infrastructure financing, which have played significantly to China’s advantage given the Caribbean’s proximity to the hurricane belt in America’s backyard. 

The Caribbean—so-called the “Third Border” of the United States—has been neglected even after Congress passed the U.S.-Caribbean Strategic Engagement Act of 2016. 

The Trump White House has shown little interest in engaging the Caribbean basin. 

Many observers think that the region is “too democratic and not poor enough” to get on the American foreign-policy agenda even though Washington has long noticed the Chinese “inroads” in America’s Third Border region.
Beijing has often hailed the Chinese investments as “win-win.” 

However, given that many of these countries both within and outside the BRI are now indebted to China, it is not clear whether the partnership is a win for both China and its counterpart—or China actually wins twice , since 

a) it is generally well understood that the switching of allegiance is more monetary than ideological, and 

b) the recipient often ends up indebted to China without the means to repay the debt.
Second, China wants to internationalize the use of its currency along BRI and with the new partners of Africa, Latin America, and the Caribbean basin. 

Making the renminbi (RMB) a global currency in 2015 had been one of the highest economic priorities of Beijing’s grand plan. 

China and some sixty-five BRI countries—which account collectively for over 30 percent of global GDP, 62 percent of the population, and 75 percent of known energy reserves—are increasingly using the RMB to facilitate trade and infrastructure projects. 

Pakistan, for one, has switched from the dollar to the RMB for bilateral trade with China after President Donald Trump publicly attacked Pakistan onTwitter for harboring terrorists. 

The China-Pakistan Economic Corridor (CPEC) to East Turkestan—as one of the massive projects under the BRI—can now depend upon a steady stream of Chinese capital. 

Pakistan can now also minimize the risk of Washington’s threats such as cutting off economic assistance and military support. 

Use of the RMB would also help authoritarian regimes like Iran, North Korea, and Sudan to undermine the American-imposed “financial sanctions” on the violations of such norms as human rights, child labor, and human trafficking. 

Furthermore, the success of BRI, if achieved, would establish Eurasia as the largest economic market in the world and the changing currency dynamics could initiate a shift in the world away from the dollar-based financial system.
Third, China seeks to secure its energy resources through new pipelines in Central Asia, Russia, and South and Southeast Asia’s deep-water ports. 

Beijing’s leadership for some years has been concerned about its “Malacca Dilemma” as Hu Jintao declared in 2003 that “certain major powers” may control the Strait of Malacca and China needed to adopt “new strategies to mitigate the perceived vulnerability.” 

The Strait of Malacca is not only the main conduit connecting the Indian Ocean and the Pacific Ocean to China via the South China Sea but also the shortest sea route between oil suppliers in the Persian Gulf and key markets in Asia. 

In 2016, sixteen million barrels of crude oil transited through the Malacca Strait each day, of which 6.3 million barrels were destined for China. 

In 2017, China surpassed the United States as the world’s largest crude oil importer. 

Therefore, the sustainability and security of energy supplies is a key input not only to China’s domestic stability and economic growth but also to its military operations and, concomitantly, the very legitimacy of the CPC. 

Initiatives under the BRI—such as the CPEC to East Turkestan colony, the Kyaukpyu pipeline in Myanmar that runs to Yunnan province, and the ongoing discussions for the proposed Kra Canal in Thailand —are of vital interest to China because they would provide alternative routes for energy resources from the Middle East directly to China that bypass the Malacca Strait. 

The BRI will also support the expansion of China’s military bases across the Bay of Bengal, Indian Ocean, and the Arabian Sea.

Global Response Led by Washington
As Beijing’s intentions become clear, the continuing tensions have now revived the Quadrilateral Security Dialogue with Australia, India, Japan, and the United States. 

Each of these Quad members has its own economic and geostrategic concerns over balancing China’s expanding power and influence with a host of counter-strategies. 

President Trump has, for example, signed into law the Asia Reassurance Initiative Act of 2018—a belated expression of America’s commitment to the security and stability of the Indo-Pacific region.
The U.S. Senate has also passed the Better Utilization of Investments Leading to Development (BUILD) Act of 2018 to reform and improve overseas private investment to help developing countries in ports and infrastructure. 

It is also aimed at countering China’s influence and assisting BRI countries with alternatives to China’s “debt-trap diplomacy.”
Viewed in the context of history, China’s rise has been nothing short of meteoric. 

In the sixty-plus years since U.S. Secretary of State John Foster Dulles declared the three principles—that 

1) the United States would not recognize the People’s Republic of China, 

2) would not admit it to the UN, and 

3) would not lift the trade embargo—

China has grown from a veritable economic backwater to one that is now projecting its economic and military power around the world. 

China now seeks to create a new set of global norms, while overturning the existing norms that Beijing claims it had no role in creating. 

That may be true, but China should remember that those existing international norms have also played a critical role in raising China to where it is today.

War Indications and Warnings
Successive American and Chinese leaders have come and gone. 

But China’s strategic objectives have remained much the same as they were in 1965 when the CIA concluded, inter alia , that the goal of CPC for the foreseeable future would be to “eject the West, especially the US, from Asia and to diminish US and Western influence throughout the world.” 

The CIA further reported that Beijing also aimed to “increase the influence of Communist China in Asia” as well as to “increase the influence of Communist China throughout the underdeveloped areas of the world.”
While tensions remain fraught between Washington and Beijing, the logic of China’s exercise of military power and its willingness to go to war, however, is more nuanced.

In any confrontation with the United States, Beijing’s strategy will include “creating sufficient doubt in the minds of American strategists” as to the likelihood of winning an armed conflict with China. 

In his book, On China, former Secretary of State Henry Kissinger concludes that rather than measuring success by the battles won, the Chinese are likely to measure success through “the means of building a dominant political and psychological position, such that the outcome of a conflict becomes a foregone conclusion.” 

By its own actions, the United States has helped China all along by sowing doubt among nations in the Indo-Pacific as to Washington’s own commitment to the security and stability of the region.
Security cooperation between the United States and its allies are not intended to “contain China.” Rather, they are aimed to maintain a balance of power in the region to ensure regional stability and no one power overwhelmingly dominates the others. 

Whatever claims China has made to a “Peaceful Rise,” it is clear that “peaceful” is ringing somewhat hollow. 

The United States should continue to engage allies and friends to maintain a consistent and persistent presence—irrespective of the administration in place—as an expression of its resolve, unity, and commitment to security, peace, and stability in the Indo-Pacific region. 

As China continues its military buildup and modernization, the challenge for American negotiators is that intentions may change, but not capabilities. 

The fact that the United Kingdom is now seeking to establish military bases in Asia and the Caribbean reflect continuing concerns not only for the United States and the countries of those regions, but also those on the European continent.
In addition, the United States and its allies should firmly apply a unified front in pressuring China and engaging Beijing to respect global norms in areas such as trade, technology transfer, and intellectual property theft. 

In this regard, it is quite clear that China’s behavior in pursuit of its Made in China 2025 goals is not only a concern for the United States but also for other advanced economies. 

In the broader scheme of things, China should measure its ideological priorities against its costs. 

If and when China and Taiwan unite, then it will be based upon mutual amity and the belief that it is in the interest of all Chinese people to do so—not through coercion and aggression. 

Beijing cannot bend history to its will.

Rogue Nation

Backlash against China jeopardizes its free ride
By BRAHMA CHELLANEY 

On a recent official visit to China, Malaysian Prime Minister Mahathir Mohamad criticized his host country’s use of major infrastructure projects – and difficult-to-repay loans – to assert its influence over smaller countries. 

While Mahathir’s warnings in Beijing against “a new version of colonialism” stood out for their boldness, they reflect a broader pushback against China’s mercantilist trade, investment and lending practices.
Since 2013, under the umbrella of its Belt and Road Initiative, China has been funding and implementing large infrastructure projects in countries around the world, in order to help align their interests with its own, gain a political foothold in strategic locations, and export its industrial surpluses. 

By keeping bidding on BRI projects closed and opaque, China often massively inflates their value, leaving countries struggling to repay their debts.
Once countries become ensnared in China’s debt traps, they can end up being forced into even worse deals to compensate their creditor for lack of repayment. 

Most notably, last December, Sri Lanka was compelled to transfer the Chinese-built strategic port of Hambantota to China on a 99-year, colonial-style lease, because it could longer afford its debt payments.
Sri Lanka’s experience was a wake-up call for other countries with outsize debts to China. 

Fearing that they, too, could lose strategic assets, they are now attempting to scrap, scale back, or renegotiate their deals. 

Mahathir, who previously cleared the way for Chinese investment in Malaysia, ended his trip to Beijing by canceling Chinese projects worth almost US$23 billion.
Countries as diverse as Bangladesh, Hungary and Tanzania have also canceled or scaled back BRI projects. 

Myanmar, hoping to secure needed infrastructure without becoming caught up in a Chinese debt trap, has used the threat of cancellation to negotiate a reduction in the cost of its planned Kyaukpyu port from $7.3 billion to $1.3 billion.
Even China’s closest partners are now wary of the BRI. 

In Pakistan, which has long worked with China to contain India and is the largest recipient of BRI financing, the new military-backed government has sought to review or renegotiate projects in response to a worsening debt crisis. 

In Cambodia, another leading recipient of Chinese loans, fears of in effect becoming a Chinese colony are on the rise.
The backlash against China can be seen elsewhere, too. 

The recent annual Pacific Islands Forum meeting was one of the most contentious in its history. Chinese policies in the region, together with the Chinese delegation leader’s behavior at the event itself, drove the president of Nauru – the world’s smallest republic, with just 11,000 inhabitants – to condemn China’s “arrogant” presence in the South Pacific. 

China cannot, he declared, “dictate things to us.”
When it comes to trade, US President Donald Trump’s escalating trade war with China is grabbing headlines, but President Trump is far from alone in criticizing China. 

With policies ranging from export subsidies and non-tariff barriers to intellectual-property piracy and tilting the domestic market in favor of Chinese companies, China represents, in the words of Harvard University’s Graham Allison, the “most protectionist, mercantilist, and predatory major economy in the world.”
As the largest merchandise exporter in the world, China is many countries’ biggest trading partner. Beijing has leveraged this role by employing trade to punish those that refuse to toe its line, including by imposing import bans on specific products, halting strategic exports (such as rare-earth minerals), cutting off tourism from China, and encouraging domestic consumer boycotts or protests against foreign businesses.
The fact is that China has grown strong and rich by flouting international trade rules. 

But now its chickens are coming home to roost, with a growing number of countries imposing anti-dumping or punitive duties on Chinese goods. 

And as countries worry about China bending them to its will by luring them into debt traps, it is no longer smooth sailing for the BRI.
Beyond Trump’s tariffs, the European Union has filed a complaint with the World Trade Organization about China’s practices of forcing technology transfer as a condition of market access. 

China’s export subsidies and other trade-distorting practices are set to encounter greater international resistance. 

Under WTO rules, countries may impose tariffs on subsidized goods from overseas that harm domestic industries.
Now, Chinese dictator Xi Jinping finds himself not only defending the BRI, his signature foreign-policy initiative, but also confronting domestic criticism, however muted, for flaunting China’s global ambitions and thereby inviting a US-led international backlash. 

Xi has discarded one of former Chinese strongman Deng Xiaoping’s most famous dicta: “Hide your strength, bide your time.” 

Instead, Xi has chosen to pursue an unabashedly aggressive strategy that has many asking whether China is emerging as a new kind of imperialist power.
International trade has afforded China enormous benefits, enabling the country to become the world’s second-largest economy, while lifting hundreds of millions of people out of poverty. 

The country cannot afford to lose those benefits to an international backlash against its unfair trade and investment practices.
China’s reliance on large trade surpluses and foreign-exchange reserves to fund the expansion of its global footprint makes it all the more vulnerable to the current pushback. 

In fact, even if China shifts its strategy and adheres to international rules, its trade surplus and foreign-currency reserves will be affected. 

In short, whichever path it chooses, China’s free ride could be coming to an end.

The Necessary War

China training pilots to target US

By Ryan Browne and Ben Westcott

Washington -- China is actively developing its fleet of long-range bombers and training its pilots for missions targeting the US, according to a new Pentagon report.
"Over the last three years, the People's Liberation Army (PLA) has rapidly expanded its overwater bomber operating areas, gaining experience in critical maritime regions and training for strikes against US and allied targets," the report said.
The "Annual Report on Military and Security Developments Involving the People's Republic of China" is a US government report mandated by Congress, which details Chinese military developments over the previous year.
This year's report also claims that China is pursuing a nuclear capability on its long-range bombers, saying the Chinese air force "has been re-assigned a nuclear mission."
"The deployment and integration of nuclear capable bombers would, for the first time, provide China with a nuclear 'triad' of delivery systems dispersed across land, sea, and air," the report said.
Chinese dictator Xi Jinping has made no secret of his desire to modernize China's armed forces, including weeding out widespread corruption in the ranks and updating the country's military hardware.
As Thursday's report notes, the PLA is undergoing "the most comprehensive restructure in its history to become a force capable of fighting joint operations."
The United States released a new Defense Strategy at the beginning of 2018 where it proclaimed "long-term strategic competitions with China" as one of the US military's top challenges.
According to Thursday's report, China is working on a "stealthy, long-range strategic bomber with a nuclear delivery capability that could be operational within the next 10 years," in addition to the bombers it already operates.
In a show of the expanding reach of Beijing's power, the Chinese military landed nuclear-capable H-6K bombers on one of their artificial islands in the South China Sea for the first time in May.
This year's report comes at a time of heightened tensions between the United States and China, amid an escalating trade war and disagreements over Beijing's actions in Taiwan and the South China Sea.
Even before the new report's release, Washington was feeling the full brunt of the Chinese military's fury over a new $717 billion US defense bill which encourages closer cooperation with Taiwan to counter Beijing.
In a statement released on Tuesday, Chinese Ministry of Defense spokesman Wu Qian said the United States was"full of Cold War mentality."
The new US report released on Thursday said China was deploying "increasingly advance military capabilities intended to coerce Taiwan" in a bid to prevent the island from declaring independence.
Despite Taiwan being self-governed for almost 70 years, the mainland Chinese government continues to view the island as an integral part of its territory.
The US report didn't just highlight threats to the United States or its allies -- there was also a broader discussion of the spread of Chinese influence around the world.
The document notes China has established its first overseas base in Djibouti and that it "will seek to establish additional military bases in countries with which it has a longstanding friendly relationship and similar strategic interests, such as Pakistan, and in which there is a precedent for hosting foreign militaries."
China formally established its Djibouti military base in July last year, followed several months later by the country's controversial acquisition of the Hambantota port in Sri Lanka.
Around the time of the Djbouti base opening, an editorial in the state-run Global Times stressed its importance to Beijing's plans. 

"Certainly this is the People's Liberation Army's first overseas base and we will base troops there. It's not a commercial resupply point... This base can support Chinese Navy to go farther, so it means a lot," said the paper.
Xi Jinping's signature infrastructure policy, the Belt and Road Initiative (BRI), served to encourage countries to fall into line with China's ambitions.
"China uses the BRI to develop strong economic ties with other countries, shape their interests to align with China's, and deter confrontation or criticism of China's approach to sensitive issues," the report said.
China also continues to develop counterspace capabilities, "including kinetic-kill missiles, ground-based lasers and orbiting space robots," the report said, a time when US President Donald Trump plans to establish a Space Force by 2020 to protect US assets in space.
Beijing is also working "to expand space surveillance capabilities that can monitor objects across the globe and in space and enable counterspace actions."

Trusting the Evil

• China's money printing industry is running at "full steam" for foreign clients including Thailand, Bangladesh, Sri Lanka, Malaysia, India, Brazil and Poland.
• The printing is linked to China's Belt and Road Initiative which has seen China build infrastructure and invest in around 60 countries from Europe, Asia, and Africa.
• Beijing has been concerned that its enemies could use fake notes to disrupt its economy and has viewed the money printing capability as important as its atomic bomb programme.

By Michael Selby-Green

China is printing more foreign money as it seeks to expand its influence on the global economy.
Money printing plants across the country are running at close to full capacity to meet an unusually high quota set by the government this year, multiple sources from the China Banknote Printing and Minting Corporation told the South China Morning Post.
Chinese yuan notes made up "a small proportion of the orders," with most of the demand coming from foreign countries participating in China's Belt and Road Initiative, one source who asked not to be named told the South China Morning Post.
Until recently China did not print foreign currency at all, but in 2013 Beijing launched the Belt and Road Initiative, a plan that seeks to stimulate economic growth in around 60 countries from Europe, Africa and Asia through investment and infrastructure projects.
Two years later China began printing money for Nepal, and today foreign customers of China's industry now also reportedly include Thailand, Bangladesh, Sri Lanka, Malaysia, India, Brazil and Poland and possibly many others that have not yet been disclosed, a source in the corporation said.
The state owned China Banknote Printing and Minting Corporation corporation which is headquartered in Beijing's Xicheng district describes itself as the world's largest money printer by scale with 18,000 employees and 10 plants for printing paper notes and coins.
In comparison to its US counterpart, the US Bureau of Engraving and Printing employs less than 2,000 people.
China's attitude towards printing currency marks a change from previous low demand for printing as Chinese citizens have turned to using their phones rather than cash.
Hu Xingdou, a professor of economics at the Beijing Institute of Technology told the South China Morning Post that a nation must have considerable trust in the Chinese government to allow it to print its banknotes.
"The world economic landscape is undergoing some profound changes. As China becomes bigger and more powerful, it will challenge the value system established by the West. Printing money for other countries is an important step," Xingdou said.
"Currency is a symbol of a country's sovereignty. This business helps build trust and even monetary alliances."
Leverage over currency can also be a powerful weapon. 

During the destruction of Libya and Muammar Gaddafi by the West seven years ago, the British government seized $1.5 billion Libyan dinars originally produced for the the dictator by British currency printer De La Rue, which sparked shortages in the country and put pressure on the regime.
Beijing has been concerned that its enemies could use fake notes to disrupt its economy and has viewed the money printing capability being as important as it's atomic bomb programme.