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.

Impoverished Laos Shows Resistance To Becoming A Client State Of China

By Ralph Jennings

Laos typically welcomes help from China. 

About 23% of the landlocked Southeast Asian country’s 6.8 million people live in poverty. 

Rural infrastructure lags behind most of its neighbors. 

So the Lao government supports growing investment from China as part of the “Belt and Road” program, a 4-year-old effort to extend the giant country’s trade and infrastructure network across Asia into Europe. 

A bellwether 414-kilometer China-Laos railway that broke ground in December is one of the “most important” projects in the Lao government’s economic development plan through 2020, Chinese official Xinhua News Agency said in a report this week.
Laos and China are both communist. 

They share a land border. 

No wonder Laos, with a GDP of just $12 billion, sometimes gets described as a client state of the world’s second-largest economy. 

But China is not the biggest foreign investor in Laos, by some measures, and pockets of resistance are emerging to the quick surge in Chinese projects.
Vietnam led other countries in 2015 in value of approved projects. 

Vietnamese firms parked more than $466 million that year, followed by Malaysia with projects worth about $430 million, according to Lao government statistics. 

Vietnam invested largely in farming, energy and natural resources, spawning 40,000 jobs, this Vietnamese news report says. 

Malaysian investment since 2000 has gone toward finance, insurance, construction and tourism. China ranked third in 2015 at about $89 million on the same list.
Singapore is now a rising star investor. 

The total 70 Singaporean-funded projects in Laos cover industry, property and farming, the Singapore Business Federation says. 

Total capitalized investment of $175 million makes Singapore the 11th biggest foreign investor by volume.

This photo taken in 2011 shows a woman working in front of her home inside Bopiat village in the Northern province of Louang Namtha where Chinese workers were doing soil analyses in preparation for a railway linking China to Laos.

Varied sources of aid and investment would put Laos, with a GDP of just 12 billion, in a league of other relatively poor Southeast Asian countries. 

Indonesia, Myanmar and Vietnam, for example, accept big blocks of investment and trade from China. 

At the same time they welcome investment from Japan, elsewhere in Southeast Asia and Western countries partly to keep Chinese influence in check. 

Beijing might tap too many natural resources, edge out domestic companies or seek political cooperation that the other country isn’t ready to offer.
China is promoting the “Belt and Road” initiative to give its companies space to expand outside a big but constrained domestic market while bolstering its geopolitical clout against old rival Japan.
“Although Sino-Laos relations have been relatively smooth and economic cooperation is on the rise, Laos is not completely subordinate to China,” says Yun Sun, senior associate with the East Asia Program under Washington-based think tank the Stimson Center. 

“Vietnam also has major influence in Laos, and the Laos government has not been completely acquiescent to Chinese views and projects.”
Chinese enterprises sometimes spar with “local authorities and residents” over land use and threats of environmental degradation, the Shanghai Institute for International Studies says in a 2016 paper. People believe Chinese companies and Chinese employees cause degradation associated with investments such as hydro-power plants, the paper says. 

“The strict control and management of land use imposes a hard constraint on Chinese companies,” it adds.
Laos, if it lets China invest too heavily, risks giving up potential jobs to Chinese workers as well, Sun adds.
The railway line that may shape up as a test case for Laos' acceptance of Chinese investment. 

It’s unclear how the $5.8 billion project will help Laos because it depends just lightly on trade, analysts say. 

A Lao official told Xinhua it should help farm production, cut travel costs, create jobs and attract more foreign investment.
But it may offer few jobs while causing “environmental degradation, land confiscation, and forced relocation,” says Andrea Giorgetta, Asia desk director with the International Federation for Human Rights in Bangkok. 

“Many communities have already had their land confiscated without receiving any compensation,” Giorgetta says. 

Conversely, she says, “the strategic importance of Laos for China is massive, as the country is crucial to give Beijing access to Southeast Asia's markets, natural resources, and infrastructure.”