The forgotten victims of China’s Belt and Road Initiative

By Aaron Halegua and Jerome A. Cohen

World leaders will soon gather in Beijing for the second forum on China’s Belt and Road Initiative — the $1 trillion plan involving China’s bilateral agreements with more than 100 countries to enhance “connectivity” by building infrastructure projects and deepening economic ties. 

In the run-up to the event, critics have highlighted the projects’ negative impacts on host countries, such as debt traps, land seizures, corruption and environmental degradation. 

Some have pointed out the difficulties of establishing fair methods for resolving the many disputes that are arising between China and its new partners. 

A few have criticized the failure of certain projects to create adequate jobs for locals.
But one group of victims is often overlooked: the Chinese workers dispatched overseas to build these projects. 

If discussed at all, these migrant workers are generally demonized as the infantry “invading” the host country and “stealing” local jobs. 

In reality, they are extremely vulnerable to exploitation by their employers, sometimes even more so than their local co-workers.
The International Labor Organization reports that there are 14.2 million people in forced-labor situations worldwide and that indebted migrant workers are particularly vulnerable. 

Overseas Chinese workers are no exception.
The recent federal criminal conviction of a Chinese construction firm executive for subjecting workers in New York to forced labor is a case in point. 

According to trial testimony, prior to leaving China, the workers signed contracts promising to not interact with locals, to not leave their residence without permission and to return to China after completing their multi-year assignment — at which point the bulk of their salary would be paid. 

Each worker was required to post a security deposit of more than $20,000 to guarantee his compliance. 

Once in New York, workers’ passports were seized and they were required to work long hours and live in unsafe conditions. 

Fear of losing their security deposit and not collecting their earned wages essentially handcuffed them from escaping this exploitation.
This case is not unique. 

Official statistics reported there were nearly 1 million overseas Chinese workers in 2018 (excluding the large number of undocumented Chinese migrants), and researchers studying Chinese projects in places such as Asia, Africa, the Middle East and the Pacific Islands have found abhorrent labor conditions for foreign workers.
Incurring significant debts to pay large recruitment fees based on inaccurate job information is quite common. 

Federal authorities found that each of 2,400 migrant workers hired by Chinese firms to build a casino in Saipan, part of the U.S. Commonwealth of the Northern Mariana Islands, paid recruiters, on average, $6,000 in fees, and that they were cheated out of millions of dollars in wages.
In Belarus, hundreds of Chinese workers were unpaid for three months after working “like slaves.” 

Chinese companies failed to pay proper wages, provide protective equipment and conduct safety training in the Bahamas, Ethiopia and Vietnam, respectively. 

A Chinese construction worker in Israel recently died on the job. 

And, for those employees working for smaller Chinese subcontractors, labor conditions can be even worse.
Deep in debt, without passports, and lacking access to transportation and independent advice, Chinese workers are often left to endure these conditions without recourse. 

Those lacking proper visas are subject to quick deportation and are thus even more vulnerable. Language barriers make effective complaining to the host government difficult, and the Chinese embassy or consulate may be hours away. 

Those workers who are courageous enough to protest their maltreatment have been beaten by their employers or arrested and deported by local authorities.
So why should China care? 

Aside from a duty to protect its citizens, these conditions frustrate China’s broader objectives for the Belt and Road Initiative, such as building “win-win” projects, “people-to-people” connections and soft power. 

If Chinese executives are eventually jailed and projects stalled, companies and lenders will lose money. 

Employing flocks of often illegal Chinese migrants housed in Chinese enclaves fuels resentment amongst locals, while subjecting its citizens to abusive and unsafe work conditions inevitably hurts China’s image. 

Rampant immigration and labor violations have already caused officials in some jurisdictions to question lax visa policies that previously welcomed Chinese.
To its credit, China has acknowledged these problems, issuing policies and regulations that prohibit the collection of recruitment fees or security deposits, ban the hiring of workers on tourist visas and instruct companies to safeguard labor rights. 

But policies and regulatory standards are usually vague and not legally binding, and the legal provisions in place are routinely violated.
China should announce plans to address this issue at this month’s forum. 

The policies governing overseas conduct by Chinese firms — particularly those regulating subcontracting — should be translated into detailed, binding domestic laws with real penalties that are rigorously enforced. 

China’s banks should require projects they fund to adhere to and report on fair labor standards and practices. 

Complaint mechanisms must be established, and workers taught how to access them. 

Chinese embassies and consulates should assist in monitoring labor conditions. 

And China should demonstrate its commitment to labor rights by finally ratifying the International Labor Organization’s conventions on forced labor.
If China hopes to persuade host countries that it respects the rights and interests of their citizens, the best place to start is by showing how seriously it takes the welfare of its own.

Friendship of the Willing

Steve Bannon and Guo Wengui Target a Common Enemy: China
By David Barboza

Stephen K. Bannon, the former strategist to President Trump, and Guo Wengui, who is wanted in China, have teamed up.

   
Just months after being pushed out of the White House, Stephen K. Bannon, President Trump’s former chief strategist, met with a Chinese billionaire at a suite in the luxurious Hays-Adams Hotel in Washington.
The billionaire, Guo Wengui, who is also known as Miles Kwok, was living in New York City and had landed on China’s most-wanted list, accused of bribery, fraud and money laundering. 

He was also a dissident and fierce critic of Beijing, seeking political asylum in the United States. And Mr. Bannon — increasingly obsessed with the China threat — was eager to talk about the Communist Party, corruption and American naval operations in the South China Sea.
Since their first discussion in October 2017, they have met dozens of times — in Dallas, on Mr. Guo’s yacht and, more often, at the billionaire’s $67.5 million apartment in the Sherry-Netherland Hotel, overlooking New York’s Central Park. 

The two shared a stage two weeks ago in Manhattan, at a news conference they organized to announce plans to set up a $100 million fund to investigate corruption and aid victims of Chinese government persecution.
“We both naturally despise the Chinese Communist Party,” Mr. Guo said in an interview last week, referring to Mr. Bannon. 

“That’s why we’ve become partners.”
It’s an unusual partnership between two political gadflies with a common, if overly grand, objective: bringing about the demise of the Chinese Communist Party.
One is an exiled businessman who has evidence of corruption at the highest levels of government in China. 

The other is a former Goldman Sachs banker who delights in lobbing political grenades at the “party of Davos,” a band of global "elites" that has undermined America’s interests at home and abroad.
As tensions between the United States and China grow, the two men are hoping to stoke them even further, by effectively calling for the overthrow of Beijing’s leadership. 

Mr. Guo is dipping into his fortune, while Mr. Bannon provides a strategy.
Mr. Bannon is, in effect, reprising the role of political provocateur he played before joining the Trump campaign in the summer of 2016. 

Back then, he was running the news site Breitbart, and helping promote books like “Clinton Cash,” which aimed to destroy Hillary Clinton’s White House bid.
In an interview in his hotel room two weeks ago, Mr. Bannon, 65, said the new China-related fund he will head, without pay, will gather evidence, share it with authorities — in the United States and elsewhere — and publish it in the media. 

The fund also targets Wall Street banks and law firms, which are complicit in China’s misdeeds.
The project, he says, is consistent with his populist and nationalist agenda. 

China’s reckless behavior is endangering the global economy, and sapping America’s strength.
“As a populist, this is outrageous,” Mr. Bannon said, noting that American financial institutions have helped back the worrisome global buying sprees of Chinese companies, with cash raised from ordinary people, including government pension funds. 

“The elites in this country have to be held accountable. We have to get the facts on the table.”
Mr. Guo, 50, insists that the fund offers a way to strike back at Beijing. 

China has pressed the Trump administration to extradite him so that he can face a raft of charges in China — allegations he strongly denies. 

Billions of dollars in assets he controlled have been frozen by Beijing. 

And Interpol, the pro-China police organization, has issued a warrant seeking his arrest. 

He now travels with a phalanx of security guards, saying he fears for his life.
The Chinese Embassy could not be reached for comment. 

But the Guo-Bannon alliance has alarmed Chinese "analysts", who view the two men as purveyors of conspiracy theories fueling anti-China sentiment.
For Mr. Bannon, the new effort plays to a longstanding and complicated interest in China. 

As a young naval officer in the 1970s, he patrolled the South China Sea. 

He also lived for a time in Shanghai, where he ran a small online gaming company. 

In recent years, he has come to view China as a military threat to the United States, and a fierce economic rival that refuses to play by the rules.
In helping elect Donald J. Trump, Mr. Bannon counseled him to take a tough line on China and step up trade pressure on Beijing. 

Mr. Trump obliged by tapping the Harvard-trained economist Peter Navarro, a longtime China critic known for his book “Death by China,” and Michael Pillsbury, a China expert at the Hudson Institute, as top trade advisers.

The effort has bristled Beijing’s stooges like Milos Zeman of the Czech Republic, right, who met with Xi Jinping in Prague in 2016.

It was during his time at the White House, Mr. Bannon says, that he first heard about Mr. Guo. 

The Chinese billionaire was living in New York, broadcasting accusations of high-level government corruption in China on Twitter and YouTube. 

By then, he had also applied for political asylum.
Alarmed by his social media campaign and his public denunciations of the Communist Party, Beijing began pressing the Trump administration to extradite Mr. Guo. 

Chinese investigators said he has ties to Ma Jian, a former spy chief now imprisoned in China on charges of bribery and abuse of power.
Inside the White House, there were disagreements over how to deal with Mr. Guo. 

Western businessmen, eager to cozy up to Beijing, lobbied President Trump to accede to China’s demands.
Mr. Bannon said he sided with those in the administration who opposed any handover, viewing Mr. Guo as a potentially valuable “intelligence asset.”
They met only after Mr. Bannon was forced out of the White House. 

Mr. Bannon says he received a call from Bill Gertz, a Washington journalist who has long been critical of China. 

Mr. Gertz told him that Mr. Guo was scheduled to give a talk in Washington at the Hudson Institute, a conservative think tank. 

The talk was canceled at the last minute.
Over lunch, Mr. Guo and Mr. Bannon discussed China’s military capabilities, as well as the financial implications of Beijing’s rule, including what impact the country’s mounting corporate debt might have on its economy. 

A friendship emerged.
“It was fantastic. He really impressed me,” Mr. Bannon said of his first meeting with Mr. Guo. 

“We talked about President Trump’s approach to China, and he went into corruption in the Chinese Communist Party.”
Mr. Bannon later introduced Mr. Guo to people in the hedge fund community, including J. Kyle Bass, who has soured on China and sought to profit by short-selling the Chinese currency.
As Mr. Bannon sharpened his critique of China’s rise, he also began meeting privately with some of America’s leading experts on China, to seek their counsel and outline his agenda. 

Few welcomed his remarks, according to people who attended some of the sessions. 

But more recently, his positions have gotten a warmer reception.
“The tectonic plates are shifting,” says Orville H. Schell, the director of the Center on U.S.-China Relations at the Asia Society. 

“Many analysts would have totally rejected him two years ago. But people are more sympathetic now that engagement with China has been defrocked.”

Mr. Schell adds, “On the China question, he’s no longer the skunk at the party.”
But Mr. Bannon is getting blowback from many Beijing’s stooges. 

On a trip abroad this year to drum up support for nationalist and populist leaders in Eastern and Central Europe, Mr. Bannon says, he was scolded for his positions on China by Milos Zeman, president of the Czech Republic and one of Beijing’s most zealous stooges in the region.
“He threw down on me hard,” Mr. Bannon says. 

“He said: ‘Tell Trump you didn’t learn from Hitler. You can’t fight on two fronts. You can’t take on radical Islam and China. You will end up in the bunker, like Hitler.”
A spokesman for Zeman said that he had challenged Mr. Bannon on American tariffs against China, and that the two men had parted ways in a very “cold atmosphere.”
Mr. Bannon is unbowed. 

He has agreed to serve as chairman of the Rule of Law Fund, the $100 million effort that Mr. Guo is financing. 

The fund plans to publicize its findings and offer financial support to businessmen, government officials and others who run afoul of the Chinese authorities — including those who flee overseas, like Mr. Guo himself.
Mr. Bannon has also joined Mr. Guo in targeting the HNA Group, the huge Chinese conglomerate that borrowed heavily and spent billions around the world, before debt and regulatory pressures forced the company to curb its global ambitions.
Until Twitter suspended his account late last year, Mr. Guo was waging an online war against HNA and its top executives. 

He claimed that the company was engaged in bribing top officials and their relatives, and has even spun theories about the death of the company’s co-chairman Wang Jian in an "accident" in France last summer. 

At their joint news conference last week, Mr. Bannon took the stage at the Pierre Hotel on Fifth Avenue in Manhattan to say, “Literally thousands of the best and brightest” in China have disappeared, been imprisoned or committed suicide under unusual circumstances and without due process.
“Today is about recklessness and accountability,” he added, noting that American financial institutions have close ties to political elites in Beijing. 

“Who profited off this? Who looked the other way?”

Malaysian Traitor

How Najib Sold Out Malaysia To China

www.sarawakreport.org
Najib Razak Arrested Again Over Corruption Scandal

The latest six charges laid against Najib and his trusty lieutenant, Treasury secretary-general Irwan Serigar Abdullah, confirm again how blatantly the previous prime minister and his government were prepared to lie in the face of evidence leaked by brave insiders to Sarawak Report.
They also lay bare the outrageous extent to which this former prime minister was willing to rob his country, laying it open to China's economic imperialism, which was naturally quite happy to suck Malaysia into a vortex of debt that would have destroyed the nation’s independence.
Way back in 2016 Sarawak Report published the secret agreement that lay behind the sudden inflation of the budget for the East Coast Rail Link to double the original proposed cost of $30 billion. 

 The secret deal with China’s state owned CCCC (China Communications Construction Company) laid out in clear detail (including amounts and dates) how the repayments on the debts owed by 1MDB were to be concealed through those inflated figures.
The Chinese government had effectively sanctioned the corrupt deal, offering Najib a 2% loan and various up-front incentives, after Najib’s fugitive proxy Jho Low negotiated the terms on his behalf in Beijing. 

 And, as the figures showed, Jho Low had taken care to look after himself in the process by apparently using the deal to also purchase shares in companies he had originally bought using 1MDB’s stolen money.
Najib and his ministers, including then Public Works Minister, Sarawak’s Fadillah Yusof, (brother to Bustari Yusof a key collaborator of Najib and major recipient of money diverted from 1MDB) at the time claimed the story was nonsense.
However, within just a few weeks Najib had visited China and signed off on exactly the contract terms that had been leaked to Sarawak Report for the now massively expensive rail project that experts predicted could never be made profitable for Malaysia.
And this week, following the new charges, the Malaysian Anti-Corruption Commission (MACC) has made clear that the money to fund 1MDB’s loan repayments was being funneled through the project just as had been detailed in Sarawak Report. 

Inflated pipe line projects in East Malaysia were being employed for the same reason.
Further tranches of cash were also purloined using an inflated and unnecessary land purchase by Bank Negara (no wonder the long standing deputy resigned) and, perhaps even more disgracefully, a straight theft of money from BRIM, the payments supposed to alleviate the lives of the poor.

Given Najib had time and again boasted of BRIM to curry votes it is particularly notable that he was prepared to raid it to pay for the massive hole in 1MDB accounts punctured by thefts used, for example, to pay for his step-son’s production of Wolf of Wall Street and Jho Low’s massive payment of a quarter of a billion dollars for one of the world’s largest super-yachts.
And yet today the ex-PM’s lawyer (Shafee Abdullah, himself facing charges for laundering money from 1MDB and failing to declare tax) called the charges laughable. 

Few others in Malaysia are likely to see the joke as the sums officially misappropriated by Najib have leapt by a further staggering RM6.6 BILLION to RM 9 BILLION (and rising).

The list of 1MDB repayments agreed with amounts and dates as part of the secret deal with CCCC to inflate the cost of the ECRL by over 100%

Ibsen Play Is Canceled in China After Audience Criticizes Government

By Alex Marshall and Zoe Mou

A handout image of an earlier production of Henrik Ibsen’s “An Enemy of the People” by the Schaubühne Berlin company.

A German theater production that invited audiences in China to voice their complaints about society has been canceled over fears of what they might say.
The Schaubühne Berlin company was due to perform “An Enemy of the People,” a 19th-century play by the Norwegian playwright Henrik Ibsen, in Nanjing on Thursday and Friday. 

But the shows were abruptly canceled after members of the audience in Beijing last week shouted criticisms of their authoritarian government.
The theater in Nanjing that was to host the play cited “technical problems,” including a hole in the stage, Tobias Veit, the Schaubühne’s executive director, said in a telephone interview.
But Mr. Veit said the real reason for the cancellation appeared to be that the theater managers deemed the play, first performed in 1883, too risky given the audience comments in Beijing.
“People were saying things like, ‘The biggest problem in China is the question of free speech,’ and things about economic scandals, corruption and how the press is not revealing the truth,” Mr. Veit said. 

“We thought they might not speak openly, but they did and actually talked about the political and social issues in China.”
After that first show on Sept. 6 at the National Center for the Performing Arts, an egg-shaped landmark in central Beijing, the venue’s management called a meeting with Mr. Veit and his colleagues, and asked them to cut the part where the audience is given a chance to voice grievances.
“They said the risk that things are said by the audience that can’t be controlled is too big,” Mr. Veit said, and that future performances would have to be canceled unless the change was made. 

After some discussion, the Schaubühne team agreed, deciding that it was better to go on with the truncated show than cancel entirely.
But Mr. Veil said he suspected that news of the controversy had reached Nanjing, the next scheduled site for performances.
“I don’t know if the authorities in Nanjing heard about it, or they were directed by Beijing,” he said.
“I would understand the reaction if we came to China to provoke, but that is not the case,” Mr. Veit said. 

“We came there to have a dialogue. That is what theater is about.”
Chen Qiwen, a social media editor who watched the second, partly censored performance of the play the next night in Beijing, said he was not surprised that “An Enemy of the People” had set Chinese officials on edge. 

Under Xi Jinping, censorship and control of culture has reached new extremes.
“To me, it was not surprising at all that they canceled the oncoming performances in Nanjing,” Mr. Chen said by telephone.
He said the Beijing performance had been his best drama viewing experience this year, “not only because of the quality of the drama, but also the ridiculousness and absurdity that has been revealed through the interaction of what happened on and off stage, and the resemblance between the story and this country’s reality.”
The Schaubühne company has performed in China many times before, and Ibsen’s plays and their liberal themes have gone through periods of wild popularity in China — especially during the May Fourth Movement in the early 20th century. 

But this particular drama would seem to have plenty of potential to unnerve Chinese censors, and embolden their critics.
“An Enemy of the People” is about a small-town doctor in Norway who discovers the public baths are contaminated. 

He tries to reveal the scandal, but is run out of the town for threatening its tourist business.
The play’s themes of pollution, corruption and a tame, muted news media have clear resonance in China. 

During the second staging in Beijing, the German actors signaled that something had been cut from their performance by pausing pointedly in silence during the censored segment of the play. 

And even in that second, censored show, one member of the audience shouted, “Freedom for the individual,” Mr. Veit said.
The third performance, on Sept. 8, was also censored.
The Schaubühne’s contemporary production has already toured globally without incident, including at the Brooklyn Academy of Music. 

It adds a 15-minute section to the play in which one of the actors reads a critique of modern society and then asks others what they think. 

Audiences often break out in criticisms of their own governments and societies, Mr. Veit said.
But the Chinese censors had fair warning of what might happen, he said.
“They invited us, they had the DVD with the complete show and the script, so they should have been aware what was going to happen,” Mr. Veit said. 

“But I think the hierarchies didn’t realize the potential that if an audience begins to talk, you don’t know what it’ll say.”

‘Human impulses run riot’: China’s shocking pace of change

Thirty years ago, politics was paramount. Now, only money counts. Yu Hua examines a nation that has transformed in a single lifetime. 

By Yu Hua

Souvenirs featuring portraits of Mao Zedong and Xi Jinping, Beijing. 

When I try to describe how China has changed over the past 50 years, countless roads appear in front of me. 

Given the sheer immensity of these changes, all I can do is try first to follow a couple of main roads, and then a few smaller ones, to see where they take us.
My first main road begins in the past. 

In my 58 years, I have experienced three dramatic changes, and each one has been accompanied by a surge in suicides among officials. 

The first time was during Mao Zedong’s Cultural Revolution, which began in 1966. 

At the start of that period, many members of the Chinese Communist party woke up one day to find they had been purged: overnight they had become “power-holders taking the capitalist road”. 

After suffering every kind of psychological and physical abuse, some chose to take their own lives. 

In the small town in south China where I grew up, some hanged themselves or swallowed insecticide, while others threw themselves down wells: wells in south China have narrow mouths, and if you dive into one headfirst, there is no way you will come out alive.
In the early stages of the Cultural Revolution, many people from the lowest tiers of society formed their own mass organisations, proclaiming themselves commanders of a “Cultural Revolution headquarters”. 

These individuals – rebels, they were called – often went on to secure official positions of one kind or another. 

They enjoyed only a brief career, however. 

Following Mao’s death in 1976, the subsequent end of the Cultural Revolution and the emergence of the reform-minded Deng Xiaoping as China’s new leader, some rebels believed they would suffer just as much as the officials they had tormented a few years before.
Thus came the second surge in suicides – this time of officials who had clawed their way to power as revolutionary radicals. 

One official in my little town drowned himself in the sea: he smoked a lot of cigarettes first, and the stubs littering the shore marked the agony of indecision that preceded his death. 

This was a much smaller surge in suicides than the first one, because Deng was not out for political revenge, focusing instead on kickstarting economic reforms and opening up to the west. 

This policy led in turn to China’s economic miracle, the downside of which has been environmental pollution, growing inequality and pervasive corruption.
In late 2012 came the third dramatic change in my lifetime, when China entered the era of Xi Jinping. 

No sooner did Xi become general secretary of the Communist party than our new leader launched an anti-corruption drive, the scale and force of which took almost everyone by surprise. 

The third surge in suicides followed. 

When officials who had stuffed their pockets during China’s breakneck economic rise discovered they were being investigated and realised they could not wriggle free, some put an end to things by suicide. 

In cases involving lower-ranking officials who were under investigation but had not yet been taken into custody, the government explanation was that their suicides were triggered by depression. 

But, if a high-ranking official took his own life, a harsher judgment was passed. 

On 23 November 2017, after Zhang Yang, a general, hanged himself in his own home, the People’s Liberation Army Daily reported that he “had evaded party discipline and the laws of the nation” and described his suicide as “a disgraceful action”.
These three surges in suicide demonstrate the failure and impotence of legal institutions in China. 

The public security organs, prosecutorial agencies and courts all stopped functioning at the start of the Cultural Revolution; thereafter, laws existed only in name. 

Since Mao’s death, a robust legal system has never truly been established and, today, law’s failure manifests itself in two ways. 

First, the law is strong only on paper: in practice, law tends to be subservient to the power that officials wield. 

Second, when officials realise they are being investigated and know their position won’t save them, some will choose to die rather than submit to legal sanctions, for officials who believe in power don’t believe in law.
These two points, seemingly at odds, are actually two sides of the same coin. 

The difference between the three surges in suicide is this: the first two were outcomes of a political struggle; framed by the start and the end of the Cultural Revolution. 

The third, by contrast, stems from the blight of corruption that has accompanied 30 years of rapid economic development. 

Of course, the anti-corruption campaign is conducted selectively, with the goal of purging Xi Jinping’s political opponents. 

And the underlying problem is: how many officials are there today who are truly clean? 

A few years ago, an official from China’s prosecutorial agencies put it to me this way: “If you were to stick all of today’s officials in a line and shoot every one of them, that would be unfair to some. But a lot would slip through the net if you only shot every other one.”
When I turn onto the second main road that stretches from the China of my childhood to the present day, what I see before me is the declining importance of the family and the growing importance of individualism. 

In Mao’s China, the individual could find no fulfilment in ordinary social life. 

If one wanted to express a personal aspiration, the only way to do so was to throw oneself into a collective movement such as the Great Leap Forward or the Cultural Revolution. 

Mind you, in those grand campaigns, the individual’s aspirations had to conform entirely to whatever the “correct” political line happened to be at that moment – the slightest deviation would cause disaster.
To use an analogy current at the time, each of us was a little drop of water, gathered into the great flood of socialism. 

But it wasn’t so easy to be that drop of water. 

In my town, there was a Cultural Revolution activist who would almost every day be at the forefront of some demonstration or other, often being first to raise his fist and shout “Down with Liu Shaoqi!” (Liu, nominally the head of state, had just been purged.) 

One day, however, he inadvertently misspoke, shouting “Down with Mao Zedong!” instead. 

Within seconds he had been thrown to the ground by the “revolutionary masses”, and thus he began a wretched phase in life, denounced and beaten at every turn.

Students wave copies of Mao Zedong’s Little Red Book at the start of the Cultural Revolution, Beijing, 1966. 

In that era, the individual could find space only in the context of family life – any independent leanings could only be expressed at home. 

That is why family values were so important to Chinese people then, and why marital infidelity was seen as so intolerable. 

If you were caught having an extramarital affair, the social morality of the day meant that you would be subjected to all kinds of humiliation: you might be paraded through the streets with half your hair shaved off or packed off to prison.
During the Cultural Revolution, there were certainly cases of husbands and wives denouncing each other and fathers and sons falling out, but these were not typical – the vast majority of families enjoyed unprecedented solidarity. 

A friend of mine told me her father had been a professor at the start of the Cultural Revolution, while her mother was a housewife. 

Her father, born to a landlord’s family, became the target of attacks, but her mother, from a humbler background, was placed among the revolutionary ranks. 

Pressed by the radicals to divorce her father, her mother outright refused – and not only that: every time her father was hauled off to a denunciation session, she would make a point of sitting in the front row and, if she saw someone beating her husband, she would rush over and start hitting back. 

Such brawls might leave her bruised and bleeding, but she would sit back down proudly in the front row, and the radicals lost their nerve and gave up beating her husband. 

After the Cultural Revolution ended, my friend’s father told her, with tears in his eyes, that had it not been for her mother he might well have taken his own life. 

There are many such stories.
After Mao’s death, the economic reforms under Deng Xiaoping brought dramatic changes to China, changes that permeated all levels of Chinese society. 

In a matter of 30 years, we went from one extreme to another, from an era where human nature was suppressed to an era where human impulses could run riot, from an era when politics was paramount to an era when only money counts.
Before, limited by social constraints, people could feel a modicum of freedom only within the family; with the loss of those constraints, that modest freedom which was once so prized now counts for little. 

Extramarital affairs have become more and more widespread and are no longer a cause for shame. 

It is commonplace for successful men to keep a mistress, or sometimes multiple mistresses – which people often jokingly compare to a teapot needing at least four or five cups to make a full tea set. 

In one case I know of, a wealthy businessman bought all 10 flats in the wing of an apartment complex. 

He installed his legally recognised wife in one flat, and his nine legally unrecognised mistresses in the other flats, one above the other, so that he could select at his pleasure and convenience on which floor of the building he would spend the night.
Having taken a couple of main roads that trace China’s journey over the past half-century, it is time to travel down some smaller ones. 

The first begins with Buddhist temples. 

During the Cultural Revolution, temples were closed down and some suffered serious damage. 

In my little town, Red Guards knocked off the heads and arms of every Buddhist sculpture in the local temples, which were then converted into storehouses. 

Afterwards, the damaged temples were restored and they all reopened, typically with two round bronze incense burners in front of the main hall: the first to invoke blessings for wealth, the second to invoke blessings for security.
When I visited temples in the 1980s, in the first censer I would often see a huge assembly of joss sticks, blazing away furiously, while in the second, a paltry handful would be smoking feebly. 

In those days China was still very poor, and, as most people saw it, when you didn’t have money, being safe didn’t amount to much. 

Now China is rich, and when you go into a temple you see joss sticks burning just as brightly in the security censer as in the wealth one – it is when you are rich that security acquires particular importance.
In China today, Buddhist temples are crowded with worshippers, while Taoist temples are largely deserted. 

A few years ago, I asked a Taoist abbot: “Taoism is native to China, so why is it not as popular as Buddhism, which came here from abroad?” 

His answer was short: “Buddhism has money and Taoism doesn’t.”
His explanation, although it rather took me aback, expresses a truth about Chinese society: money, or material interest, has become the main motivating force. 

In the 1980s, there was a series of student protests in China, culminating in the Tiananmen demonstrations of 1989, when not just students but city dwellers all across the country joined the rallies. 

Back then, the demonstrations were largely motivated by concern for the fate of the nation and a desire to see democratic freedoms put in place. 

Today, people still demonstrate, but on a very small scale, and these demonstrations – “mass incidents” in official parlance – are completely different from the protests in the 1980s. 

Protests today are not geared towards transforming society – they are simply designed to protect the material interests of the group involved.
A few years ago, in the eastern province of Jiangsu, the education authorities announced that universities would be reserving more places for students from poor areas in west China. 

This triggered an uproar among the parents of Jiangsu high-school students preparing for the university entrance examination. 

Concerned that this new policy would reduce their children’s chances of getting into university, they marched in the streets to protest. 

Something similar happened a few years ago in Shanghai, when retirees took to the streets, worried that if welfare funds were allocated to poor areas, their own retirement benefits would be slashed.
These constant “mass incidents”, I should point out, reflect real issues. 

In recent years, for instance, many retired military veterans have gathered together across the country in protests against the stingy benefits and pensions they receive from the state. 

Back in the 1980s, they argue, veterans used to be more generously rewarded, relative to the cost of living. 

Today, even though China is richer, they receive little. 

Unsurprisingly, veterans feel shortchanged and disrespected.

A reconstructed traditional shopping street in Beijing, 2008. 

Other mass incidents, such as the widespread demonstrations by truck drivers in June, have been sparked by the fierce economic competition that now characterises life in China. 

In numerous industries, it has become common practice to try to secure more business by pushing down prices as low as they can possibly go. 

I was struck by this new reality a few years ago, at the end of a trip I had taken to South Africa for the World Cup. 

At the airport, I bought a vuvuzela in the airport as a souvenir, paying more than 100 yuan (£11). 

It was only when I got back to Beijing that I realised it was made in China. 

At the start, Chinese manufacturers had set their factory price at over five yuan a piece, but they soon found themselves being underbid. 

Some factories ultimately set their price as low as 2.2 yuan, when the production cost was 2 yuan per unit. 

The result of all this ferocious competition is that the profit margin keeps getting slimmer and slimmer, and those who suffer most are ordinary workers, who often see no increase in their salary even as their work hours are extended.
Now I need to take two other roads – the road of innovation and the road of nostalgia. 

Innovation first. 

Given the speed at which new technologies become dominant, you sometimes feel that there is no gap at all between new and old. 

Take mobile payments: in the space of just a few years, Alibaba’s Alipay mobile app and Tencent’s WeChat Pay app have been loaded on to practically every smartphone in the country. 

From big shopping malls to little corner shops – any place where a transaction can be made will have the scannable QR codes for these two payment platforms displayed in a prominent location. 

People just need to take their phone out of their pocket, do a quick scan and the payment is made. Even Chinese beggars have to keep up with the times: sometimes they too have a QR code handy, and they will ask passersby to scan it and use the mobile payment platform to dispense some spare change.
I recently went for more than a year without using cash or a credit card, because it is just so convenient to pay by phone instead. 

This July, though, when my English translator came to Beijing and my wife and I took him out for dinner, I went to scan the restaurant’s QR code but the transaction failed to go through. 

Instead of trying a second time, I suddenly felt an urge to pay in cash. 

When I pulled some banknotes out of my pocket, handed them to the cashier and received change in return, I felt a pleasant tingle of novelty.
This novelty is all the more remarkable given that just 30 years ago, when Chinese people went on business trips, they would worry so much about their money being stolen that they would hide cash in their underpants, the safest place for it. 

They would have a little pocket sewn on the inside, with a button for extra security. 

When a bill needed to be paid they would reach a hand into their underwear, grope around a bit, and pull out the requisite five-mao or one-yuan note, distinguishable by feel because one was smaller than the other. 

Women would withdraw to a secluded spot to retrieve their cash, but some men would have no such inhibitions and would rummage about in their underpants quite unabashedly.
When I turn to the road of nostalgia, I think of how my home county of Haiyan has transformed. When I was a boy, Haiyan had a total population of 300,000, with only 8,000 living in the county town itself. 

Now, the county has a population of 380,000, of whom 100,000 live in the county seat. 

Urbanisation has created a lot of problems, one of them being what happens after farmers move to cities. 

Local governments have expropriated large swathes of agricultural land to enable an enormous urban expansion program: some of the land is allocated to industry in order to attract investment, build factories and boost government revenues, but most of it is sold off at a high price to real-estate developers. 

The result is that high-rise apartment buildings now sprout in profusion where once only crops grew. After their land and houses in the countryside are expropriated, farmers “move upstairs” into housing blocks that the local government has provided in compensation. 

In wealthy counties, some farmers may be awarded up to three or four apartments, in which case they will live in one and rent out the other two or three; others may receive a large cash settlement.
But the questions then become: how do they adjust to city life? 

Now disconnected from the form of labour to which they were accustomed, what new jobs are there for them to do? 

Some drive taxis and some open little shops, but others just loaf around, playing mahjong all day, and others take to gambling and lose everything they have. 

Every time a community of dispossessed farmers settles into a new housing project, gambling operations will follow them there, because some of the residents will be flush with cash after the government payouts. 

In China, it is forbidden to open gambling establishments, but this doesn’t stop unlicensed operators from cramming their gambling accessories into a few large suitcases and lugging them around these new neighbourhoods, where they will talk their way into the homes of resettled farmers. 

The gambling outfits play hide-and-seek with the police, setting up shop here today, shifting to a new spot tomorrow.

Shanghai’s Pudong financial district, 2013. 

What is the situation back where the farmers came from – the houses in the countryside now expropriated but yet to be demolished? 

Peasants often have dogs to protect the home and guard the property. 

When peasants move to the cities, they no longer need guard dogs, so they leave them behind. 

And so you see poignant scenes in those empty, weed-infested farm compounds, as those abandoned dogs, all skin and bones, faithfully continue to perform sentry duty, now rushing from one end of the property to the other, standing on a high point and gazing off into the distance, their eyes burning with hope, longing for the past to return.
Wishing the past could return is a mood that is spreading through today’s society. 

Two patterns are typical. 

The more widespread of the two reflects the yearnings of the poor. 

China’s enhanced status as the world’s second largest economy has brought them few benefits; they continue to lead a life of grinding hardship. 

They cherish their memories of the past, for although they were poor then, the word “unemployed” was yet to exist. 

What’s more, in those days there was no moneyed class in a real sense: Mao’s monthly salary, for example, was just 404.8 yuan, compared to my parents’ joint income of 120 yuan. 

There was only a small gap between rich and poor, and social inequalities were limited.
A different form of nostalgia is prevalent among successful people who, having risen as high as they can possibly go, now find themselves in danger of tumbling off the cliff. 

Someone reported to me an exchange he had had with one of Shanghai’s ultra-rich, a man who had relied on bribery and other underhand methods to transform himself from a pauper into a millionaire. Realising he would soon be arrested and anticipating a long prison term, he stood in front of the floor-to-ceiling windows of his huge, lofty, luxurious office and looked down at the construction workers far below, busy building the foundation of another skyscraper. 

How he wished he could be one of those workers, he said, for though their work was hard and their pay was low, they didn’t have to live in a state of such high anxiety. 

Faced with the prospect of losing everything they have gained, such people find themselves wishing their spectacular career hadn’t happened at all, wishing they could reclaim the past.
If the past were really to return – that past where you needed grain coupons to buy rice, oil coupons to buy cooking oil, cotton coupons to buy cloth, that past of dire material shortages, where the supply of goods was dictated by quotas – would those people who hanker for the past be happy? 

I doubt it.
As I see it, when the poor pine for the past, this is not a rational desire – it is simply a way of venting their feelings, the voicing of a frustration that is rooted in their discontent with current Chinese realities. 

And when that other, smaller group of people who have been successful in government or business realise they are going to spend the rest of their life behind bars and wish they could reclaim the past, this sentiment springs only from a wistful regret: “If I had known this was going to happen, I wouldn’t have got myself into this mess.”
I’m reminded of a joke that’s been doing the rounds. 

Here is what’s unfair about this society:
The pretty girl says: “I want a diamond ring!” She gets it.
The rich guy says: “I want a pretty girl!” He gets her.
I say: “I want a shower!” But there’s no water.
That last situation, I myself have experienced. 

In my early years, more often than not, water would cut off just as I was having a shower – sometimes at the precise moment when I had lathered myself in soap from head to toe. 

All I could do then was hammer on the pipe with my fists, at the same time raising my head so that the final few drops of water would rinse my eyes and save them from smarting; as for when the water would come on again, I could only wait patiently and hope heaven was on my side. 

Back then, nobody would have seen water stoppages at shower-time as a social injustice, because in those bygone days, there were no rich guys, and so pretty girls didn’t get diamond rings and rich guys didn’t get pretty girls.
It is often said that children represent the future. 

In closing, let me try to capture the changing outlook of three generations of Chinese boys as a way of mapping in simple terms China’s trajectory over the years. 

If you asked these boys what to look for in life, I think you would hear very different answers.
A boy growing up in the Cultural Revolution might well have said: “Revolution and struggle.”
A boy growing up in the early 1990s, as economic reforms entered their second decade, might well have said: “Career and love.”
Today’s boy might well say: “Money and girls.”

Axis of Evil

Pakistan is the next victim of Chinese imperialism
By Ishaan Tharoor

It’s been barely more than two weeks since Imran Khan’s electoral victory in Pakistan, but the country’s next prime minister is already facing a geopolitical crisis. 

Pakistan’s current-account deficit is perilously high, its foreign-currency reserves perilously low. 

Its external debt has ballooned after accepting some $62 billion in Chinese financing, part of an ambitious regional infrastructure project that has yet to boost Pakistan’s economy. 

Khan’s first major act as prime minister may be asking the International Monetary Fund for a new bailout.
But that’s where the trouble begins. 

Critics at home lament Pakistan’s addiction to the fund — it has spent 22 of the past 30 years laboring under the terms of more than a dozen successive IMF bailouts. 

The austerity measures the IMF demands, they argue, have shackled growth and prevented Pakistan from making substantive reforms. 

Pakistan could instead turn to China for fresh loans, but that could make Islamabad even more beholden to Beijing than it already is.
In that regard, Pakistan is becoming the latest testing ground of a key plank in China’s global strategy. 

Its sweeping One Belt, One Road initiative — a vast $1 trillion infrastructure and development plan that has led to Chinese companies investing in bridges, airports, dams, railroads and other ventures in dozens of countries — is Beijing’s signature global project. 

But it has prompted accusations that it fuels corruption and autocratic behavior in vulnerable countries. 

From Malaysia to Colombia, the opacity surrounding Chinese-backed endeavors has led to allegations of graft, mismanagement and, in the case of at least one mega-dam project, possibly triggered a devastating landslide.
Moreover, the initiative has pushed some countries into a morass of debt. 

The starkest example so far has been Sri Lanka, whose government was unable to repay $6 billion in loans used to build an expensive Chinese-led port and airport project in Hambantota, a once-sleepy but strategically located backwater. 

As a result, Sri Lankan authorities ceded control of the port and some 15,000 acres of land around it to Beijing on a 99-year lease. 

The move led to accusations that China is engaging in a 21st century style of “creditor imperialism."

Fishermen stand on a boat outside Gwadar Port, operated by China Overseas Ports Holding Co., in Gwadar, Balochistan, Pakistan, on Tuesday, July 4, 2018. What used to be a small fishing town on the southwestern corner of Pakistan is giving way for construction of roads and buildings to house banks, insurance and clearing agents. China Overseas Port Holdings, Gwadar Port’s operator, has separately spent $250 million to add five new cranes, construct a building in less than six months by importing ready made parts and create space for a free zone. 

“States caught in debt bondage to China risk losing both their most valuable natural assets and their very sovereignty,” warned Indian commentator Brahma Chellaney. 

“The new imperial giant’s velvet glove cloaks an iron fist — one with the strength to squeeze the vitality out of smaller countries.”
At a Tuesday panel in Washington, Husain Haqqani, a former Pakistani ambassador to Washington, quipped that the Chinese-Pakistan Economic Corridor (CPEC)— the formal name for a complex $62 billion infrastructure-development plan — actually should be called “Colonizing Pakistan to Enrich China.”
In recent years, China has stepped up its involvement in various sectors of the Pakistani economy, from its nuclear-energy industry to the establishment of a host of special economic zones to a costly port project in the city of Gwadar on the Arabian Sea.

“Pakistan does need China’s help, as it faces a slew of economic challenges, including a backward industrial supply chain, weak foreign trade and a huge portion of its population still living in poverty and without proper education,” noted an editorial in China’s state-run Global Times, urging Beijing officials to “ignore the noise and step up its investment in Pakistan.”
Khan, meanwhile, is a fiery nationalist and economic populist. 

He has repeatedly gestured to the “China model” as something Pakistan should emulate. 

But it’s not yet clear what any of that means in practice, and the enthusiasm for his rhetoric may simply reflects widespread frustration with Pakistan’s systemic corruption and long-standing habit of turning to the IMF and accepting its diktats.
“The pattern is always the same,” wrote Nadeem Ul Haque, a former IMF official and former deputy chairman of the Pakistani government’s Planning Commission. 

“With the Fund’s blessing, the government goes on a shopping spree, taking out costly loans for expensive projects, thus building up even more debt and adding new inefficiencies. After a few years, another crisis ensues, and it is met by another IMF program.”
Khan doesn’t look set to break that tradition. 

But the Trump administration may force him to. 

“Make no mistake. We will be watching what the IMF does,” said Secretary of State Mike Pompeo at the end of last month, arguing that he didn’t want the U.S. to indirectly refinance Pakistani loans to China. 

“There’s no rationale for IMF tax dollars — and, associated with that, American dollars that are part of the IMF funding — for those to go to bail out Chinese bondholders or China itself."
As tensions flare between China and the United States over trade, that outlook is only gaining support. 

In Washington, lawmakers are increasingly wary about China’s opportunistic maneuvering across Asia, Africa and Latin America.
“The goal for the [Belt and Road Initiative] is the creation of an economic world order ultimately dominated by China,” read a recent letter from a bipartisan group of senators to Pompeo and Treasury Secretary Steven T. Mnuchin. 

“It is imperative that the United States counters China’s attempts to hold other countries financially hostage and force ransoms that further its geostrategic goals.”
For Pakistan, caught between China’s ambition and Washington’s concern, there are few good choices.
“These are our two masters,” said Turab Hussain, an economics professor at the Lahore University of Management Sciences, told the New York Times. 

“How do you serve both?”

China Got “The Rest” Wrong

Beijing is wrong to think other countries will roll over when confronted.

by Huong Le Thu

There is an argument that the West got China wrong. 

It argues that the assumption that China’s economic opening would lead to its political liberalization and transformation into a “ responsible stakeholder ” was incorrect. 

In fact, American policy advisors even concluded that basing Washington’s policy towards China on these assumptions has been a failure . 

China is a country that not only has taken advantage of the rules-based world order but also one that got away with it abusing it.

China has grown into a monstrous economic power that is not constrained by the global rules, but instead is a “ ruthless stakeholder .”
Indeed, China is providing more and more evidence that it is not willing to abide by international law and does not hesitate to act unilaterally in matters it considers critical for its interests—such as in the South China Sea. 

Beijing’s four-no’s strategy to ignore the Arbitral Tribunal ruling from 2016—no participation, no acceptance, no recognition and no enforcement—remains one of most striking examples of open disregard for the rules-based international order. 

China's ability to shake the current order is hard to deny, but it has not necessarily reached its desired position and still is at risk of a stronger push-back from other countries.
China’s military activities in the South China Sea are not only a concern for its direct neighbors and claimants in the disputed waters; they present high risks and unwelcomed tensions to an already unstable region. 

Despite earlier assurances from China that it is not militarizing the artificial islands built in the South China Sea, the continued show of force undermines Beijing’s credibility and peaceful intentions. Military build-ups and actions have also become more prominent in the Taiwan Strait, where recently Beijing conducted war games . 

The question is why is Beijing risking its reputation, and potentially even confrontation, instead of asserting its global position peacefully?
Xi Jinping’s China is ambitious not only in laying out its strategic vision of a new order, but also in racing against time to implement that vision. 

That dream has many facets well beyond militarising artificial islands in the South China Sea. 

The Belt and Road Initiative (BRI) involves building ports in places ranging from Africa’s Djibouti to wharves in Vanuatu in the Pacific. 

China’s BRI also includes securing access to sea and land-routes globally—from the Arctic to Latin America—as well as proposing new global institutions such as the Asian Infrastructure Investment Bank (AIIB). 

These are all elements of a unified plan for the extension of China’s global reach . 

Finally, all of these massive and potentially game-changing projects are seen as Xi Jinping’s flagship initiatives.
Beijing's strategy to attain dominance has been primarily based on two key components. 

The first is incrementally asserting its territorial claims, even if doing so often includes open disregard for the rule of law. 

The second is offering economic inducements for states to play ball while forging close relationships with key political and business leaders, often with financial incentives.
By many accounts, China's aggressive tactics in the South China Sea seem to have been successful, by both effectively undermining the rules-based order while continuing to expand the range of its Beijing's operations. 

Whether the international community will respond stronger to China's growing arrogance remains a question, but one thing is sure—while the international community keeps pondering, Beijing has managed to gain the time necessary to further its military plans.
Another issue that concerns more actors globally is China's economic statecraft. 

Initially, the BRI projects have been hailed as both the most significant change in global history and China’s gift to the world. 

In fact, many enjoyed the excitement of the new economic and transportation infrastructure opportunities that Chinese initiatives offered. 

Beijing's generosity has been well received, but not without varying levels of reservations about the political implications of Chinese money. 

Furthermore, the global context has helped to strengthen this perception. 

For example, the U.S. protectionist agenda, the Europian Union's self-absorption, and Japan's low-profile economy have only boosted the view that China is filling a void in global leadership. 

After all, China's global projects of the BRI and the AIIB gained the support of even those who had ongoing territorial disputes with China, including India, Malaysia, Vietnam, and the Philippines.
Yet, the Belt and Road Initiative—perhaps the most anticipated project among the developing economies—has become a subject of skepticism and scrutiny. 

For instance, debt traps and compromised national strategic assets have become the most feared outcomes of the BRI. 

Furthermore, Sri Lanka's case of its ill-fated Hambantota Port remains the poster-warning for many. Sri Lanka's $1 billion in Chinese loans were used as leverage to give Bejing a controlling interest in, and ninety-nine-year lease over, the Hambantota Port. 

As a result, the perception that Chinese aid and loans are a trap is spreading around the South Pacific islands.
Also, something has changed over the past months, and there is a growing wave of push-back from around the globe led by "natural rivals," too-close-to-comfort neighbors, and even more distant countries. 

Concerns have also been voiced by countries who have no geographical security concerns vis-à-vis China, like New Zealand or the Czech Republic . 

While the scale and intensity of push-back vary, one concern is universal—that Chinese economic initiatives translate too directly into the capacity to extort political influence over the recipient country. 

For example, to some degree, most Chinese preferences have been incrementally met over the years through international support for Beijing and silence on its taboo topics such as Taiwan, Tibet and human rights. 

But China's political influence now exceeds many other countries' levels of tolerance—particularly given Bejing's influence includes meddling with economic partners' domestic politics.
In Australia, for example, there is an ongoing debate over Chinese influence. 

This includes Four Corners, a report released in June 2017, which exposed the personal connections of Chinese-born business people, not only with Australian politicians but also with high ranking UN officials. 

In America, concerns are stronger over Russian meddling into U.S. domestic politics, but the Chinese presence at universities is also a matter of a widespread discomfort. 

Reports show that the Chinese Community Party has been setting up ‘cells’ at the University of Illinois, while the Chinese Students Scholars Associations (CSSAs) across the country have been distributing money for activities and engagement praising the Chinese government. 

Elsewhere, in Central Europe, the concern about Chinese state influence is not a distant concept either. 

A website, called Chinfluence, collects the cases of Chinese political and economic influence in the Czech Republic, Slovakia and Hungary.
China's fast-lane to global influence has been pursued through the exploitation of that most common of human weaknesses—greed and fear. 

Aiming at the top leadership and by-passing lengthy processes through corruption has proved effective for Bejing. 

But only for short-term and in certain countries.
Seeking to influence politicians is rather costly and can be only useful in the short term. 

In democratic countries, the political mandate is comparatively short, although former politicians can remain influential and high profile public voices. 

In the case of Australia, former Labour Senator Sam Dastyari demonstrates China’s attempts to cultivate influence and how it could backfire. 

Financial donations from an Australian-Chinese businessman, combined with public statements that seemed to echo the Chinese state’s line on the South China Sea, brought about the end of Dastyari’s political career. 

It also fuelled an ongoing debate over legislative changes relating to foreign interference and foreign donations.
Malaysia’s May general election, which overthrew Najib Razak and over sixty years of his party’s rule also shows the risks for China in building relationships with selected individuals. 

China’s top-down mindset dictates its strategy of forging relationships with targeted individuals, which is effective and fast in the short-term, but which fails to build a foundation for long-term. 

In other words, China fails to institutionalize relationships that stretch beyond personal connections with those leaders should they fall or leave office.
Najib Razak of Malaysia, Hun Sen of Cambodia, and Rodrigo Duterte of the Philippines all fit into this template. 

So far, only Hun Sen—who has dissolved his opposition party heading to the July elections—has proved the strategy useful. 

In addition, Duterte has proven to be a game-changer in the lawfare in the South China Sea by disregarding the legal victory from the Tribunal Arbitral ruling for the sake of improving relations with Beijing. 

But, as a populist leader, he is also subject to his nation’s swinging mood.
In contrast, China’s relationship with Vietnam is an example of a relationship which does involve a few long-standing and close affinities extending beyond personal benefits. 

Based on a party-to-party relationship, Hanoi and Beijing have developed a history of close ties dating back a couple of decades. 

Yet, instead of nurturing that relationship, Beijing’s rush to assert its position in the South China Sea has pushed its fellow communist regime away. 

In fact, that rift has been to the degree that even though Hanoi is traditionally suspicious of America, Vietnam has invited an American aircraft carrier to visit and is working on strategic partnerships with Washington and its allies. 

Given the size and importance of Vietnam, the costs to the Chinese state in its relationship with Hanoi might seem insignificant in comparison to Beijing’s perceived value of the South China Sea claims. 

But souring the relationship with Vietnam—including recently preventing it from conducting oil and gas explorations or China’s dispatching of long-range bombers to the Paracels—is hurting its relationships by stirring up the otherwise relatively pacified periphery.
Trump’s erratic leadership in global affairs does provide a strategic opportunity for China to fill that gap. 

Xi Jinping is astute in seizing this opportunity. 

In fact, China would be welcome to fill in the global leadership void on many critical issues, such as climate change, trade and infrastructure development. 

But while Xi’s vision of a “community of common destiny” is attractive in various ways for many economies around the world, China's execution of the vision invokes increasing unease, including among those who do not have strategic connections with Beijing. 

China's grand plans to achieve national rejuvenation by 2049 sounds impressive, but the tactics it applies are creating tensions. 

Xi Jinping's ambitious and impatient strategy of assertion is insensitive to fellow "common community" members' values, interests and needs. 

Additionally, it is a missed opportunity for global leadership and contradicts the rhetoric of international harmony and ‘win-win' behavior. 

Leaders supporting Beijing are also driven by the pursuit of immediate gains, seeking economic benefits rather than long-term common beliefs and solidarity. 

China is doubling down on a costly strategy of buying "followers" rather than winning the hearts and minds of friends and partners. 

This is neither an effective nor an efficient strategy.

Paper Dragon

CHINA’S MILITARY HAS ‘PEACE DISEASE’ AFTER DECADES WITHOUT WAR
BY JASON LEMON 

China’s military is sick with “peace disease” after decades without war, the country’s military newspaper has claimed.
In an effort to combat the “disease,” the Chinese People’s Liberation Army (PLA) has stepped up its efforts to improve battle readiness. 

Xi Jinping has also ordered the military to take steps to ensure soldiers are combat ready and have the required skills they need to fight, South China Morning Post reported. 

Instead of focusing on numbers, Xi has instituted reforms emphasizing better training for troops.
“Peace disease has been a common symptom in our military for decades,” the People’s Liberation Army Daily wrote in an editorial, SCMP reported. 

“If we do not make up our mind to eliminate those evils, we must pay a heavy cost in the event of a war.”
Members of a military honor guard prepare for a welcome ceremony for Kazakhstan’s President Nursultan Nazarbayev, outside the Great Hall of the People, in Beijing, on June 7. In an effort to combat the “peace disease,” the Chinese People’s Liberation Army has stepped up its efforts to improve battle readiness.

Although China boasts the world's largest standing military, with more than 2.1 million active-duty service people, the country’s last offensive took place in the late 1970s in Vietnam. 

As a result, military leaders and the Chinese president are afraid troops have grown complacent and less capable. 

Xi aims to transform his nation’s military into a world-class fighting force within the next 30 years.
“We can only stop a war when we are able to fight,” the PLA newspaper wrote. 

“Let the army get back on the right track, concentrating on combat-ready training.”
Speaking to South China Morning Post, retired PLA Colonel Yue Gang pointed to corruption, as well as avoiding responsibilities, as the major problems plaguing the Chinese armed forces.
“Apart from corruption, job omission is the next key symptom of ‘peace disease’ in the Chinese military that should be cured,” Yue said, pointing out that the government is working to address both issues.
The army publication also warned that China currently faces greater security threats and unprecedented global concerns. 

Currently, China continues to flex its muscles in the disputed waters of the South China Sea, raising tensions with multiple Asian neighbors. 

Beijing has also moved to open foreign military outposts, such as a military hub in the African country Djibouti.
Members of China’s military honor guard march during a welcome ceremony for Kazakhstan’s President Nursultan Nazarbayev, outside the Great Hall of the People, in Beijing, on June 7.

As tensions increase with the U.S. over trade, China has also continued to improve ties with Russia. Chinese State Councilor and Defense Minister General Wei Fenghe met with the visiting Colonel General Oleg Salyukov, commander-in-chief of the Russian Land Forces, in Beijing on Tuesday, telling him that their two nations will “jointly deal with threats and challenges.” 

Last month, Xi also awarded Russian dictator Vladimir Putin a friendship medal, calling the Moscow leader his “best, most intimate friend.”
Despite China's might, the U.S military is widely seen to be the most powerful in the world. 

The U.S. Armed Forces currently have more than 1.3 million active duty personnel, and an annual budget of $610 billion, compared to China’s $216 billion. 

Unlike China’s military, the U.S. forces definitely do not suffer from “peace disease.” 

In recent years, U.S. troops have been involved in conflicts in Iraq, Afghanistan, Pakistan, Libya, Syria, Yemen and Somalia.

China's Debt Trap

How China Got Sri Lanka to Cough Up a Port

By Maria Abi-Habib

A cargo ship navigating one of the world’s busiest shipping lanes, near Hambantota, Sri Lanka, in May.

HAMBANTOTA, Sri Lanka — Every time Sri Lanka’s president, Mahinda Rajapaksa, turned to his Chinese allies for loans and assistance with an ambitious port project, the answer was yes.
Yes, though feasibility studies said the port wouldn’t work. 

Yes, though other frequent lenders like India had refused. 

Yes, though Sri Lanka’s debt was ballooning rapidly under Rajapaksa.
Over years of construction and renegotiation with China Harbor Engineering Company, one of Beijing’s largest state-owned enterprises, the Hambantota Port Development Project distinguished itself mostly by failing, as predicted. 

With tens of thousands of ships passing by along one of the world’s busiest shipping lanes, the port drew only 34 ships in 2012.
And then the port became China’s.
Rajapaksa was voted out of office in 2015, but Sri Lanka’s new government struggled to make payments on the debt he had taken on. 

Under heavy pressure and after months of negotiations with the Chinese, the government handed over the port and 15,000 acres of land around it for 99 years in December.
The transfer gave China control of territory just a few hundred miles off the shores of a rival, India, and a strategic foothold along a critical commercial and military waterway.
The case is one of the most vivid examples of China’s ambitious use of loans and aid to gain influence around the world — and of its willingness to play hardball to collect.
The debt deal also intensified some of the harshest accusations about Xi Jinping’s signature Belt and Road Initiative: that the global investment and lending program amounts to a debt trap for vulnerable countries around the world, fueling corruption and autocratic behavior in struggling democracies.

Former President Mahinda Rajapaksa of Sri Lanka, center, holding court at a wedding in Colombo in June.

Months of interviews with Sri Lankan, Indian, Chinese and Western officials and analysis of documents and agreements stemming from the port project present a stark illustration of how China and the companies under its control ensured their interests in a small country hungry for financing.
• During the 2015 Sri Lankan elections, large payments from the Chinese port construction fund flowed directly to campaign aides and activities for Rajapaksa, who had agreed to Chinese terms at every turn and was seen as an important ally in China’s efforts to tilt influence away from India in South Asia. The payments were confirmed by documents and cash checks detailed in a government investigation seen by The New York Times.
• Though Chinese officials and analysts have insisted that China’s interest in the Hambantota port is purely commercial, Sri Lankan officials said that from the start, the intelligence and strategic possibilities of the port’s location were part of the negotiations.
• Initially moderate terms for lending on the port project became more onerous as Sri Lankan officials asked to renegotiate the timeline and add more financing. And as Sri Lankan officials became desperate to get the debt off their books in recent years, the Chinese demands centered on handing over equity in the port rather than allowing any easing of terms.
• Though the deal erased roughly $1 billion in debt for the port project, Sri Lanka is now in more debt to China than ever, as other loans have continued and rates remain much higher than from other international lenders.
Rajapaksa and his aides did not respond to multiple requests for comment, made over several months, for this article. 

Officials for China Harbor also would not comment.
Estimates by the Sri Lankan Finance Ministry paint a bleak picture: This year, the government is expected to generate $14.8 billion in revenue, but its scheduled debt repayments, to an array of lenders around the world, come to $12.3 billion.
“John Adams said infamously that a way to subjugate a country is through either the sword or debt. China has chosen the latter,” said Brahma Chellaney, an analyst who often advises the Indian government and is affiliated with the Center for Policy Research, a think tank in New Delhi.
Indian officials, in particular, fear that Sri Lanka is struggling so much that the Chinese government may be able to dangle debt relief in exchange for its military’s use of assets like the Hambantota port — though the final lease agreement forbids military activity there without Sri Lanka’s invitation.
“The only way to justify the investment in Hambantota is from a national security standpoint — that they will bring the People’s Liberation Army in,” said Shivshankar Menon, who served as India’s foreign secretary and then its national security adviser as the Hambantota port was being built.
The Hambantota Port gets only a small percentage of Sri Lanka’s port business, overshadowed by the main complex in the capital.
Sri Lankan workers processing cars being unloaded from a ship at Hambantota Port.
An Engaged Ally
The relationship between China and Sri Lanka had long been amenable, with Sri Lanka an early recognizer of Mao’s Communist government after the Chinese Revolution. 

But it was during a more recent conflict — Sri Lanka’s brutal 26-year civil war with ethnic Tamil separatists — that China became indispensable.
Rajapaksa, who was elected in 2005, presided over the last years of the war, when Sri Lanka became increasingly isolated by accusations of human rights abuses. 

Under him, Sri Lanka relied heavily on China for economic support, military equipment and political cover at the United Nations to block potential sanctions.
The war ended in 2009, and as the country emerged from the chaos, Rajapaksa and his family consolidated their hold. 

At the height of Rajapaksa’s tenure, the president and his three brothers controlled many government ministries and around 80 percent of total government spending. 

Governments like China negotiated directly with them.
So when the president began calling for a vast new port development project at Hambantota, his sleepy home district, the few roadblocks in its way proved ineffective.
From the start, officials questioned the wisdom of a second major port, in a country a quarter the size of Britain and with a population of 22 million, when the main port in the capital was thriving and had room to expand. 

Feasibility studies commissioned by the government had starkly concluded that a port at Hambantota was not economically viable.
“They approached us for the port at the beginning, and Indian companies said no,” said Mr. Menon, the former Indian foreign secretary. 

“It was an economic dud then, and it’s an economic dud now.”
But Rajapaksa greenlighted the project, then boasted in a news release that he had defied all caution — and that China was on board.
The Sri Lanka Ports Authority began devising what officials believed was a careful, economically sound plan in 2007, according to an official involved in the project. 

It called for a limited opening for business in 2010, and for revenue to be coming in before any major expansion.
The first major loan it took on the project came from the Chinese government’s Export-Import Bank, or Exim, for $307 million. 

But to obtain the loan, Sri Lanka was required to accept Beijing’s preferred company, China Harbor, as the port’s builder, according to a United States Embassy cable from the time, leaked to WikiLeaks.
That is a typical demand of China for its projects around the world, rather than allowing an open bidding process. 

Across the region, Beijing’s government is lending out billions of dollars, being repaid at a premium to hire Chinese companies and thousands of Chinese workers, according to officials across the region.
There were other strings attached to the loan, as well, in a sign that China saw strategic value in the Hambantota port from the beginning.
Nihal Rodrigo, a former Sri Lankan foreign secretary and ambassador to China, said that discussions with Chinese officials at the time made it clear that intelligence sharing was an integral, if not public, part of the deal. 

In an interview with The Times, Mr. Rodrigo characterized the Chinese line as, “We expect you to let us know who is coming and stopping here.”
In later years, Chinese officials and the China Harbor company went to great lengths to keep relations strong with Rajapaksa, who for years had faithfully acquiesced to such terms.
In the final months of Sri Lanka’s 2015 election, China’s ambassador broke with diplomatic norms and lobbied voters, even caddies at Colombo’s premier golf course, to support Rajapaksa over the opposition, which was threatening to tear up economic agreements with the Chinese government.
As the January election inched closer, large payments started to flow toward the president’s circle.
At least $7.6 million was dispensed from China Harbor’s account at Standard Chartered Bank to affiliates of Rajapaksa’s campaign, according to a document, seen by The Times, from an active internal government investigation. 

The document details China Harbor’s bank account number — ownership of which was verified — and intelligence gleaned from questioning of the people to whom the checks were made out.
With 10 days to go before polls opened, around $3.7 million was distributed in checks: $678,000 to print campaign T-shirts and other promotional material and $297,000 to buy supporters gifts, including women’s saris. 

Another $38,000 was paid to a popular Buddhist monk who was supporting Rajapaksa’s electoral bid, while two checks totaling $1.7 million were delivered by volunteers to Temple Trees, his official residence.
Most of the payments were from a subaccount controlled by China Harbor, named “HPDP Phase 2,” shorthand for Hambantota Port Development Project.
An expressway extension to Hambantota Port. Chinese analysts have not given up the view that the port could become profitable.

China’s Network
After nearly five years of helter-skelter expansion for China’s Belt and Road Initiative across the globe, Chinese officials are quietly trying to take stock of how many deals have been done and what the country’s financial exposure might be. 

There is no comprehensive picture of that yet, said one Chinese economic policymaker, who like many other officials would speak about Chinese policy only on the condition of anonymity.
Some Chinese officials have become concerned that the nearly institutional graft surrounding such projects represents a liability for China, and raises the bar needed for profitability. 

Xi Jinping acknowledged the worry in a speech last year, saying, “We will also strengthen international cooperation on anticorruption in order to build the Belt and Road Initiative with integrity.”
In Bangladesh, for example, officials said in January that China Harbor would be banned from future contracts over accusations that the company attempted to bribe an official at the ministry of roads, stuffing $100,000 into a box of tea, government officials said in interviews. 

And China Harbor’s parent company, China Communications Construction Company, was banned for eight years in 2009 from bidding on World Bank projects because of corrupt practices in the Philippines.
Since the port seizure in Sri Lanka, Chinese officials have started suggesting that Belt and Road is not an open-ended government commitment to finance development across three continents.
“If we cannot manage the risk well, the Belt and Road projects cannot go far or well,” said Jin Qi, the chairwoman of the Silk Road Fund, a large state-owned investment fund, during the China Development Forum in late March.
In Sri Lanka’s case, port officials and Chinese analysts have also not given up the view that the Hambantota port could become profitable, or at least strengthen China’s trade capacity in the region.
Ray Ren, China Merchant Port’s representative in Sri Lanka and the head of the Hambantota port’s operations, insisted that “the location of Sri Lanka is ideal for international trade.” 

And he dismissed the negative feasibility studies, saying they were done many years ago when Hambantota was “a small fishing hamlet.”
Hu Shisheng, the director of South Asia studies at the China Institutes of Contemporary International Relations, said that China clearly recognized the strategic value of the Hambantota port. 

But he added: “Once China wants to exert its geostrategic value, the strategic value of the port will be gone. Big countries cannot fight in Sri Lanka — it would be wiped out.”
Although the Hambantota port first opened in a limited way in 2010, before the Belt and Road Initiative was announced, the Chinese government quickly folded the project into the global program.
Shortly after the handover ceremony in Hambantota, China’s state news agency released a boastful video on Twitter, proclaiming the deal “another milestone along the path of #BeltandRoad.”
The Mahinda Rajapaksa International Cricket Stadium in Hambantota. The stadium has more seats than the population of the area’s main town.
Pilgrim monks visiting the largely empty Mattala Rajapaksa International Airport, just 150 miles southeast from the country’s main airport.

A Port to Nowhere
The seaport is not the only grand project built with Chinese loans in Hambantota, a sparsely populated area on Sri Lanka’s southeastern coast that is still largely overrun by jungle.
A cricket stadium with more seats than the population of Hambantota’s district capital marks the skyline, as does a large international airport — which in June lost the only daily commercial flight it had left when FlyDubai airline ended the route. 

A highway that cuts through the district is traversed by elephants and used by farmers to rake out and dry the rice plucked fresh from their paddies.
Rajapaksa’s advisers had laid out a methodical approach to how the port might expand after opening, ensuring that some revenue would be coming in before taking on much more debt.
But in 2009, the president had grown impatient. 

His 65th birthday was approaching the following year, and to mark the occasion he wanted a grand opening at the Hambantota port — including the beginning of an ambitious expansion 10 years ahead of the Port Authority’s original timeline.
Chinese laborers began working day and night to get the port ready, officials said. 

But when workers dredged the land and then flooded it to create the basin of the port, they had not taken into account a large boulder that partly blocked the entrance, preventing the entry of large ships, like oil tankers, that the port’s business model relied on.
Ports Authority officials, unwilling to cross the president, quickly moved ahead anyway. 

The Hambantota port opened in an elaborate celebration on Nov. 18, 2010, Rajapaksa’s birthday. Then it sat waiting for business while the rock blocked it.
China Harbor blasted the boulder a year later, at a cost of $40 million, an exorbitant price that raised concerns among diplomats and government officials. 

Some openly speculated about whether the company was simply overcharging or the price tag included kickbacks to Rajapaksa.
By 2012, the port was struggling to attract ships — which preferred to berth nearby at the Colombo port — and construction costs were rising as the port began expanding ahead of schedule. 

The government decreed later that year that ships carrying car imports bound for Colombo port would instead offload their cargo at Hambantota to kick-start business there. 

Still, only 34 ships berthed at Hambantota in 2012, compared with 3,667 ships at the Colombo port, according to a Finance Ministry annual report.

A fish stall in a zone that is due to be turned into a large industrial area surrounding the Hambantota Port.
Harvesting rice in a field where the industrial area is due to be built.
“When I came to the government, I called the minister of national planning and asked for the justification of Hambantota Port,” Harsha de Silva, the state minister for national policies and economic affairs, said in an interview. 

“She said, ‘We were asked to do it, so we did it.’ ”
Determined to keep expanding the port, Rajapaksa went back to the Chinese government in 2012, asking for $757 million.
The Chinese agreed again. 

But this time, the terms were much steeper.
The first loan, at $307 million, had originally come at a variable rate that usually settled above 1 or 2 percent after the global financial crash in 2008. (For comparison, rates on similar Japanese loans for infrastructure projects run below half a percent.)
But to secure fresh funding, that initial loan was renegotiated to a much higher 6.3 percent fixed rate. Rajapaksa acquiesced.
The rising debt and project costs, even as the port was struggling, handed Sri Lanka’s political opposition a powerful issue, and it campaigned heavily on suspicions about China. 

Rajapaksa lost the election.
The incoming government, led by President Maithripala Sirisena, came to office with a mandate to scrutinize Sri Lanka’s financial deals. 

It also faced a daunting amount of debt: Under Rajapaksa, the country’s debt had increased threefold, to $44.8 billion when he left office.

And for 2015 alone, a $4.68 billion payment was due at year’s end.
Chinese construction workers, bottom left, walking home from work in front of Colombo’s changing skyline.

Signing It Away
The new government was eager to reorient Sri Lanka toward India, Japan and the West. 

But officials soon realized that no other country could fill the financial or economic space that China held in Sri Lanka.
“We inherited a purposefully run-down economy — the revenues were insufficient to pay the interest charges, let alone capital repayment,” said Ravi Karunanayake, who was finance minister during the new government’s first year in office.
“We did keep taking loans,” he added. 

“A new government can’t just stop loans. It’s a relay; you need to take them until economic discipline is introduced.”
The Central Bank estimated that Sri Lanka owed China about $3 billion last year. 

But Nishan de Mel, an economist at Verité Research, said some of the debts were off government books and instead registered as part of individual projects. 

He estimated that debt owed to China could be as much as $5 billion and was growing every year. 

In May, Sri Lanka took a new $1 billion loan from China Development Bank to help make its coming debt payment.
Government officials began meeting in 2016 with their Chinese counterparts to strike a deal, hoping to get the port off Sri Lanka’s balance sheet and avoid outright default. 

But the Chinese demanded that a Chinese company take a dominant equity share in the port in return, Sri Lankan officials say — writing down the debt was not an option China would accept.
When Sri Lanka was given a choice, it was over which state-owned company would take control: either China Harbor or China Merchants Port, according to the final agreement, a copy of which was obtained by The Times, although it was never released publicly in full.
China Harbor employees heading to work in Colombo.
Chinese workers in their dormitory in Colombo.
China Merchants got the contract, and it immediately pressed for more: Company officials demanded 15,000 acres of land around the port to build an industrial zone, according to two officials with knowledge of the negotiations. 

The Chinese company argued that the port itself was not worth the $1.1 billion it would pay for its equity — money that would close out Sri Lanka’s debt on the port.
Some government officials bitterly opposed the terms, but there was no leeway, according to officials involved in the negotiations. 

The new agreement was signed in July 2017, and took effect in December.
The deal left some appearance of Sri Lankan ownership: Among other things, it created a joint company to manage the port’s operations and collect revenue, with 85 percent owned by China Merchants Port and the remaining 15 percent controlled by Sri Lanka’s government.
But lawyers specializing in port acquisitions said Sri Lanka’s small stake meant little, given the leverage that China Merchants Port retained over board personnel and operating decisions. 

And the government holds no sovereignty over the port’s land.
When the agreement was initially negotiated, it left open whether the port and surrounding land could be used by the Chinese military, which Indian officials asked the Sri Lankan government to explicitly forbid. 

The final agreement bars foreign countries from using the port for military purposes unless granted permission by the government in Colombo.
That clause is there because Chinese Navy submarines had already come calling to Sri Lanka.
The Port of Colombo, Sri Lanka.
Strategic Concerns
China had a stake in Sri Lanka’s main port as well: China Harbor was building a new terminal there, known at the time as Colombo Port City. 

Along with that deal came roughly 50 acres of land, solely held by the Chinese company, that Sri Lanka had no sovereignty on.
That was dramatically demonstrated toward the end of Rajapaksa’s term, in 2014. 

Chinese submarines docked at the harbor the same day that Prime Minister Shinzo Abe of Japan was visiting Colombo, in what was seen across the region as a menacing signal from Beijing.
When the new Sri Lankan government came to office, it sought assurances that the port would never again welcome Chinese submarines — of particular concern because they are difficult to detect and often used for intelligence gathering. 

But Sri Lankan officials had little real control.
Now, the handover of Hambantota to the Chinese has kept alive concerns about possible military use — particularly as China has continued to militarize island holdings around the South China Sea despite earlier pledges not to.
Sri Lankan officials are quick to point out that the agreement explicitly rules out China’s military use of the site. 

But others also note that Sri Lanka’s government, still heavily indebted to China, could be pressured to allow it.
And, as Mr. de Silva, the state minister for national policies and economic affairs, put it, “Governments can change.”
Now, he and others are watching carefully as Rajapaksa, China’s preferred partner in Sri Lanka, has been trying to stage a political comeback. 

The former president’s new opposition party swept municipal elections in February. 

Presidential elections are coming up next year, and general elections in 2020.
Although Rajapaksa is barred from running again because of term limits, his brother, Gotabaya Rajapaksa, the former defense secretary, appears to be readying to take the mantle.
“It will be Mahinda Rajapaksa’s call. If he says it’s one of the brothers, that person will have a very strong claim,” said Ajith Nivard Cabraal, the central bank governor under Rajapaksa’s government, who still advises the family. 

“Even if he’s no longer the president, as the Constitution is structured, Mahinda will be the main power base.”

The Colombo Port City development.