China and the United States face off in Djibouti

By Arwa Damon and Brent Swails

Djibouti -- A dirt track at Djibouti's Doraleh Port leads to a series of unassuming single-story buildings that, earlier this year, hosted the world's two superpowers.
The Chinese contingent took their seats to the far right of the podium where US Rear Adm. Heidi Berg formally launched the US-led military exercise, Cutlass Express.
Cutlass, and the handful of other annual US-led drills held throughout the African continent, are a low-risk and relatively low-cost way for US Africa Command (AFRICOM) to gain and keep regional allies.
But in Djibouti -- a tiny nation of just 884,000 people that is a key Red Sea ally of the US -- and throughout Africa, there's new competition for local loyalties from China's military, which is increasingly asserting its influence on the continent.
In 2017, China's People Liberation Army (PLA) opened its first overseas base in Djibouti. 

The sprawling, gray concrete complex sits on a prime location next to one of Djibouti's main ports -- and is just a 15-minute drive from the US military's only permanent base on the continent, Camp Lemonnier.

The Chinese contingent takes their seats as US Rear Adm. Heidi Berg takes to the podium to formally launch the US-led military exercise, Cutlass Express.

Lemonnier is a strategic asset for US missions abroad, used as a staging area for America's intelligence and counterterrorism operations on the African continent and beyond. 

One AFRICOM official, who was authorized to speak on the condition of anonymity, says the physical PLA presence in Africa is becoming a long-term strategic concern for America.
"They (China) have upped their game, in plain language, and ultimately they are offering things that our partners want, that our partners need," said the AFRICOM official. 

"In places, we have concerns we are being out-competed."
On the ground, however, both sides are engaged in respectful diplomacy. 

The night before the Cutlass Express, Chinese military officials invited Adm. Berg and her contingent on board a Chinese destroyer docked at the nearby harbor. 

And, for the first time, Berg welcomed PLA commander Liang Yang to the exercise's opening ceremony.
When Berg was asked to comment on the "us or them" narrative, she was quick to refocus attention on what the US can do for its allies.
"I think we want to ensure that we don't frame it ... that Africa is a backdrop and an arena for us to score points off China," Berg said. 

"We are here and our investment and focus is on building our African partners."
The Chinese contingent at the Cutlass Express launch declined to comment to CNN, but Xi Jinping made it clear at a high-level summit in Beijing last September that he's pursuing a "comprehensive strategic and cooperative partnership" with Africa, which includes a $60 billion package of aid, investment and loans to Africa.
"We are about to set out on a new journey in history," he said.

Expanding in Africa
China has been expanding its military ties in Africa for years, through extended peacekeeping missions, military personnel training and the China-Africa Peace and Security Initiative forum.
The US, naturally, viewed the base with unease, given its proximity to Camp Lemonnier and Djibouti's main container port, which is the primary source of supplies to sustain a force of around 4,000 US personnel on the base.
"It's no secret that roughly 98% of the logistics support for Djibouti, as well as Somalia and East Africa, come through that port," AFRICOM's commanding Gen. Thomas Waldhauser told a recent Senate committee briefing. 

"That port is one of five entities in the overall Djiboutian port. And so, our access there is necessary and required."

The USS Chung-Hoon leaves Djibouti on its way back to its home port. The destroyer took part in this year's Cutlass Express exercise.

The loss of that access would be a devastating blow to American interests and operations. 

One way that could happen would be if China were to leverage its control over Djibouti's debt into control over Djibouti's ports. 

China holds around 80% of the country's debt.

Debt fears
In recent years, China has increased its decades-long military ties with African countries by expanding training programs and increasing weapon sales. 

It's now the number two arms supplier to sub-Saharan Africa after Russia and the number three supplier to North Africa, behind Russia and the US, according to research from the Stockholm International Peace Research Institute.
But at the heart of the US concern is China's lending practices on the continent. 

Since 2000, African countries have borrowed about $130 billion from China, according to a Johns Hopkins analysis. 

And the amount of loans has tripled since 2012, largely through its Belt and Road Initiative (BRI).

"This is a central preset to Chinese strategy. When you look through history you preemptively shape the environment, shape the potential battlefield, so that your adversaries decide to not even come out on to the field to begin with. There's real potential for the debt to do that," said Gabriel Collins, co-founder of research group, China SignPost.

Last year, US national security advisor John Bolton was blunt. 

During a Heritage Foundation speech that laid out the Trump administration's Africa policy, he claimed "China uses bribes, opaque agreements, and strategic use of debt to hold African states captive to Beijing's demands."
The US fears about losing access to the port could be rooted in history. 

In 2017, Sri Lanka surrendered a major port to China after defaulting on the Chinese loan.
In that instance, the Sri Lankan government, then led by Prime Minister Mahinda Rajapaksa, took on $1.5 billion of Chinese debt to develop the Hambantota Port, which ultimately failed. 

To ease its debt burden, Sri Lanka agreed to hand it over on a 99-year lease.

Djibouti's container port is key for US operations at Camp Lemonier. The base has no direct access to water.

Proponents of China's BRI point out that the scheme often funds much-needed projects that other investors would balk at supporting, and that its focus on infrastructure, with a target investment of $1 trillion in construction is having an immediate impact on the continent.
Djiboutian officials insist the country will maintain control over its ports and that, so far, the government has a solid track record of paying off its loans.

"The funding is coming from China mainly, but we own the investments, we own the assets. It's a port, it's a railway, it's a free zone, we own two thirds of our investments," said the chairman of the Djibouti Ports and Free Zones Authority, Aboubaker Omar Hadi.
But Hadi is also well aware of the risks of -- literally -- banking on China. 

He just returned from a trip to Asia and Europe to try to drum up investment. 

"We don't want to depend only on one side, one continent, one country," he said.
Hadi bristles at the notion that his country and others on the continent are caught in a superpower tug of war. 

"The world needs to understand whether it's east or west or north or south, that we are going to decide our destiny ... Everyone is welcome," he said.

The future
The official position of the Djibouti government may do little to reassure skeptics who believe China's investment program is a front for a more sinister motive of establishing a military footprint worldwide.
"The theory is that if China continues unmitigated expansion, both militarily and economically, and we don't compete to protect our influence, the consequence could be that we are edged out of those areas and we lose the ability to address what we perceive as counterterrorism national interests in Africa," the AFRICOM official said.
Countering China's economic might is hardly something that should fall on AFRICOM, said Wake Forest professor Benabdallah.
"China has been operating (in Africa) for the better part of two decades now and has been doing so in a very smart way, with really close networks and connections that have been in the work for several years," she said.

Camp Lemonier is home to around 4,000 US military personnel. The base is a strategic asset for US missions abroad, used as a staging area for America's intelligence and counter terrorism operations on the African continent and beyond.

Benabdallah added that much of China's expansion in Africa is the result of strategic dedication led by Xi. 

The Chinese dictator has made six trips to the continent, and since January 1990, the Chinese foreign minister's first trip every year has been to a country in Africa.
Collins, founder of China SignPost, said soft power has long been a distinguishing feature of US foreign policy, and the current administration would be best served by taking a multilateral approach to relations in Africa.
"For the price of a single drone or fighter jet you could establish multiple university branches, and you would still have the funds to support those over the long haul," he said.
"It's not an instant payoff for someone who has the impatience of some of our current administration, but if we took a root cause strategy, 10 years from now there would be enormous dividends from that."
But until the US can figure out an "all of government" approach, some believe that much of the responsibility continues to land on AFRICOM's shoulders.
"We have gone from a unipolar world to realizing at best it's bipolar, at worst it's multipolar," the AFRICOM official said. 

"I would have a stark perspective. I think we are losing -- in Africa we are losing."

China will build string of military bases around world

Locations include Middle East, Pakistan, and western Pacific to protect Belt and Road Initiative
The Guardian

Beijing currently has just one overseas military base, in Djibouti. 

The US Defense Department expects China to add military bases around the world to protect its investments in it ambitious One Belt One Road global infrastructure program, according to an official report released on Thursday.
Beijing currently has just one overseas military base, in Djibouti, but is believed planning others, including possibly Pakistan, as it seeks to project itself as a global superpower.
“China’s advancement of projects such as the ‘One Belt, One Road’ Initiative (OBOR) will drive military overseas basing through a perceived need to provide security for OBOR projects,” the Pentagon said in its annual report to Congress on Chinese military and security developments.
“China will seek to establish additional military bases in countries with which it has a longstanding friendly relationship and similar strategic interests, such as Pakistan, and in which there is a precedent for hosting foreign militaries,” the report said.
That effort could be constrained by other countries’ wariness of hosting a full-time presence of the People’s Liberation Army, the report noted.
But target locations for military basing could include the Middle East, Southeast Asia, and the western Pacific.
The report came as the Pentagon also warned that deepening Chinese activities in the Arctic region could also pave the way for a strengthened military presence, including the deployment of submarines to act as deterrents against nuclear attack.
The assessment is included in the US military’s annual report to Congress on China’s armed forces.
The Pentagon report noted that Denmark has expressed concern about China’s interest in Greenland, which has included proposals to establish a research station, establish a satellite ground station, renovate airports and expand mining.
“Civilian research could support a strengthened Chinese military presence in the Arctic Ocean, which could include deploying submarines to the region as a deterrent against nuclear attacks,” the report said.

US commits to aiding Philippines in South China Sea.

China has already established well-armed outposts on contested atolls it build up in the South China Sea.
Last year, there were reportedly discussions on a base in the Wakhan corridor of northwest Afghanistan.
In addition, The Washington Post recently identified an outpost hosting many Chinese troops in eastern Tajikistan, near the strategic junction of the Wakhan Corridor, China, and Pakistan.
Chinese dictator Xi Jinping has sought to project the country’s power beyond its immediate “back yard” in east and southeast Asia.
This includes strengthening the country’s presence in international institutions, acquiring top-flight technology and establishing a strong economic presence worldwide.
It also includes projecting the country’s military force on land, sea and in space, the report notes.
“China’s leaders are leveraging China’s growing economic, diplomatic, and military clout to establish regional preeminence and expand the country’s international influence,” the report said.
Beijing in particular increasingly see the United States as becoming more confrontational in an effort to contain China’s expanding power, it said.

Chinese Peril

China’s advances seen to pose increasing threat to American military dominance

By Missy Ryan and Paul Sonne

The Chinese aircraft carrier Liaoning takes part in military drill in the western Pacific on April 18, 2018. 

China’s drive to acquire cutting-edge weaponry and establish itself as a global military power poses an increasing threat to American defense superiority, a new intelligence report said Tuesday.
The Defense Intelligence Agency’s first public report on Chinese military capability reflects mounting concern within the U.S. government that the United States is not moving quickly enough to respond to Beijing’s rapid military rise or its efforts to dominate American allies in the Pacific.
“During the past decade alone, from counter-piracy operations in the Gulf of Aden, to an expanded military presence in the East and South China Seas, China has demonstrated a willingness to use the [People’s Liberation Army] as an instrument of national power in the execution of what they call their historic mission in the new century,” Dan Taylor, a senior DIA analyst, told reporters at the Pentagon.
The assessment by the Pentagon’s intelligence agency comes as the U.S. military begins reshaping itself to counter powers such as China and Russia after nearly two decades of focusing on counterinsurgency and anti-terrorism operations. 

Though then-Defense Secretary Jim Mattis released a new national defense strategy in January 2018 outlining the goals, the Pentagon is still working on implementing them, with officials promising that proof of the transformation will be visible in the department’s 2020 budget request, which is due out next month.
Acting defense secretary Patrick Shanahan has made the effort to outpace China a central aim of his tenure since joining the Pentagon as the deputy defense secretary in 2017. 

A former Boeing executive, Shanahan oversaw the 2020 budget request, which he has called a “masterpiece” designed to show how the U.S. military is reorienting itself toward China and Russia.
The DIA report places a new emphasis on the impact of China’s emerging status as a global military player, following Beijing’s establishment of permanent external facilities in the Horn of Africa and the South China Sea.
According to the report, China’s Communist Party leaders remain largely focused on preserving internal stability. 

But they also are increasingly concerned with dominance across East Asia, driven in large part by Beijing’s goal of reunification with Taiwan.
China has sought to demonstrate regional primacy by challenging other nations’ claims to disputed islands in the South China and East China seas, and building its first-ever locally designed and produced aircraft carrier. 

It has also developed new long-range bomber capabilities and constructed military outposts in disputed areas, allowing it to project military power in new ways.
Outside of Asia, China established its first foreign military base, in Djibouti, and used naval assets to evacuate civilians from Yemen.
Beijing has powered its advances with massive increases in its military budget, which grew at an average annual rate of 10 percent from 2000 to 2016, the DIA said. 

While the rate of China’s spending growth has slowed, it remains robust at up to 7 percent a year.
The report also said that China has acquired technology “by any means available” in its long-running effort to modernize its armed forces, an effort the DIA said has put the Chinese military “on the verge of fielding some of the most modern weapon systems in the world.”
Defense officials say that two areas where China may be pulling ahead of the United States are hypersonic glide vehicles and intermediate- and long-range missiles.
China is developing additional capabilities that can be used to attack and jam satellites after testing an antisatellite missile system in 2014, according to the DIA, which said Beijing also was researching and possibly developing antisatellite lasers.
In cyberspace, the Chinese may be combining cyberreconnaissance, cyberattack and cyberdefense into one organization known as the Strategic Support Force, which could centralize command and control and reduce bureaucracy in cyberwarfare, according to the report. 

Beijing has identified controlling the “information domain” as a prerequisite to achieving victory in modern war, the report says.
China is also overhauling its defense industrial base to help deliver cutting-edge technologies to Chinese forces and at times sell them to others. 

Among the disciplines the DIA says China has targeted for development are hypersonic missiles, nanotechnology, high-performance computing, quantum communications, space systems, artificial intelligence, autonomous systems and robotics.

The Empire Strikes Back

Bolton Outlines a Strategy for Africa That’s Really About Countering China

By Mark Landler and Edward Wong

WASHINGTON — The Trump administration rolled out a new strategy for Africa on Thursday, but it was really all about China.
John R. Bolton, President Trump’s national security adviser, said the United States would lavish money and greater attention on the African continent, casting it as a crucial battleground in the global economic contest between the United States and China.
But Mr. Bolton conceded that the United States had limited resources to compete with the tens of billions of dollars China is pouring into Africa. 

He also threatened to withdraw American aid for some United Nations peacekeeping missions, which he labeled ineffective, as well as for certain African countries like South Sudan that he said were corrupt or ungrateful.
Mr. Bolton’s speech, at the Heritage Foundation, was his latest effort to flesh out what Mr. Trump’s “America First” foreign policy means for particular regions. 

In Africa, the greatest threat came not from poverty or Islamist extremism but from an expansionist China, as well as Russia.
“They are deliberately and aggressively targeting their investments in the region to gain a competitive advantage over the United States,” Mr. Bolton said. 

“China uses bribes, opaque agreements and the strategic use of debt to hold states in Africa captive to Beijing’s wishes and demands.”
Mr. Bolton announced a new program, “Prosper Africa,” to support American investment across Africa. 

Without attaching a dollar figure, he said the United States would facilitate alternatives to the large, state-directed public works projects pushed by the Chinese.
Those projects were turning African countries into economic vassals of China. 

Zambia, for example, owes Beijing $6 billion to $10 billion, according to Mr. Bolton, and is at risk of having the Chinese take over its national power company.
China built a military base in another indebted African country, Djibouti, a few miles from where the United States has a base for counterterrorism operations. 

Earlier this year, the Chinese fired military-grade laser beams at American aircraft, injuring two pilots.
Experts welcomed the focus on Africa, which has often been neglected by both Republican and Democratic administrations. 

But some noted the contradiction between Mr. Bolton’s promise of increased investment and a rollback of American engagement in other areas.
“You can’t counter a multifaceted, long-term Chinese play just by increasing investment,” said Grant T. Harris, a former adviser on Africa to Barack Obama. 

“Washington needs to understand that China is investing in relationships, not just infrastructure.”
President Trump famously asked why the United States should accept African immigrants, belittling their countries with an epithet. 

The first lady, Melania Trump, made a four-country tour of the continent in October, which drew more attention for her wardrobe than for her encounters with Africans.
Mr. Bolton traced his interest in Africa to his first job in government, working at the United States Agency for International Development during the Reagan administration. 

Yet he made clear that he viewed much of the American aid sent to Africa as wasted or misspent.
“From now on,” he said, “the United States will not tolerate this longstanding pattern of aid without effect.”
South Sudan, where rival leaders recently agreed to end a ruinous civil war, is among those at risk of losing aid. 

Mr. Bolton said the country was still being led by “the same morally bankrupt leaders” who prolong “horrific violence and immense human suffering.”
In the 2017 fiscal year, foreign assistance to Africa from the State Department and the Agency for International Development amounted to $8.7 billion. 

From 2014 to 2018, the United States provided some $3.8 billion in humanitarian aid to South Sudan and its neighbors. 

American businesses invested $50 billion in Africa in 2017, according to the State Department.
The flow of money from China to Africa has been substantial, but much of it is not what experts consider aid. 

From 2000 to 2014, Chinese financing to Africa totaled $121.6 billion, according to an analysis by AidData, a research center based at the College of William & Mary in Virginia.

About 40 percent of that can be defined as aid, based on the parameters of the Organization for Economic Cooperation and Development, according to Bradley Parks, AidData’s executive director. During the same period, the United States provided $106.7 billion in aid, according to the group.
Most of the Chinese money comes in the form of loans, many of which are for projects being built by Chinese state-owned companies. 

The contracts typically have strict conditions attached to them; borrowers often have to start repaying the loans within a few years, unlike loans from the World Bank, which can have a grace period of a decade.
“The work that they do, the assistance that they provide, is more about China than it is about the countries that are the target, or the recipients of the assistance,” said Mark Green, the administrator of the Agency for International Development.
But the Chinese companies have had great success in winning contracts for projects in Africa. 

In many cases, this is tied to bribing officials. 

But in others, Chinese companies have been good at managing relations because, unlike American companies, they have a strong presence on the ground.
“For American businesses to compete effectively in the region, the U.S. government must develop methods to come to the table with a full package,” said Mike Davis, an American businessman in Uganda. 

“The current approach has not proven effective when you compare it against the competition.”
President Trump, driven by a desire to confront China’s growing influence, signed a bill to double the war chest of the Overseas Private Investment Corporation, which finances American businesses in developing nations. 

Starting in October, the agency will have $60 billion to dole out in the form of loans, loan insurance and equity.
But the agency’s chief executive, Ray W. Washburne, said projects that the agency finances still “have got to make economic sense,” adding, “The Chinese seem to be doing these loan-to-own programs.”

Chinese Peril

China’s expanding military footprint in Africa
By Michael Kovrig 

China’s growing engagement with African countries got a publicity boost on 3-4 September with the latest Forum on China-Africa Cooperation (FOCAC).
The triennial event brought leaders and officials from 53 African countries and the African Union (AU) to Beijing for meetings that culminated in a resolution to continue strengthening ties and a renewed pledge of billions of dollars in Chinese loans, grants and investments.
Over the past decade China’s role in peace and security has also grown rapidly through arms sales, military cooperation and peacekeeping deployments in Africa. 

Today, through FOCAC and support to the AU and other mechanisms, China is making a growing effort to take a systematic, pan-African approach to security on the continent.
This rising role in security undergirds Beijing’s economic statecraft and commercial interests in Africa, helps professionalise China’s military and protect its citizens there, and furthers its ambitions to be a major power with global influence. 

The rapid pace of change is taking Chinese security policy practitioners into new territory.
To avoid pitfalls for themselves and their African partners, they should deepen their expertise on local politics, societies and cultures, and the dynamics of conflict and its remedies; better monitor and modulate how China’s own engagement affects stability on the continent; and work more transparently with other governments, multilateral organisations and civil society to address problems.

Blue helmets and bases
In his address to the 2015 UN General Assembly, Chinese dictator Xi Jinping offered $100-million in military assistance over five years to support the AU’s peace and security architecture through initiatives such as the African Standby Force and African Capacity for Immediate Response to Crises.
The 2015 FOCAC summit in South Africa reinforced this commitment. 

In Xi’s keynote address to this year’s forum and in its ensuing plan of action, China pledged to channel some of that funding into a China-Africa Peace and Security Fund, military assistance and 50 programs in law and order, peacekeeping, anti-piracy and counter-terrorism.
These FOCAC initiatives will build on an increasingly pervasive Chinese presence in Africa’s security sector, of which the most visible example is its growing participation in UN peacekeeping operations. 

Based on the UN’s formula for assessed funding, which considers China’s relative wealth and permanent member status on the Security Council, Beijing is now the second-largest contributor to the peacekeeping budget.
Chinese personnel have served on missions in Africa for decades, but until 2013 they were small contingents in unarmed roles such as medical and engineering support. 

China now provides more personnel than any other permanent member of the Security Council – they numbered 2 430 as of September.
This total is fewer than the leading troop contributors — Ethiopia, Rwanda, Bangladesh, India, Nepal and Pakistan each provide upward of 5 000 — but still large. 

Chinese peacekeepers now serve in infantry, policing and other roles in Africa.
With the end of China’s fourteen-year deployment with the UN Mission in Liberia in March, most are in the Democratic Republic of Congo, Mali, Sudan and South Sudan, where they have come under fire and taken casualties. 

As International Crisis Group described in its 2017 report, China’s Foreign Policy Experiment in South Sudan, the civil war in South Sudan also obliged China to nuance its avowed doctrine of non-interference to allow for more active roles in mediation and UN mandates to protect civilians — with the blessing of the AU and neighbouring countries.
Informed by those experiences, Beijing in 2015 set up a unique UN Peace and Development Trust Fund that the UN Secretariat manages. 

In 2016 and 2017, it allocated over $11-million for UN projects that include building African capacity to train police and soldiers for peacekeeping roles, regional operational analysis for peacekeeping missions and support for the AU’s initiative to “Silence the Guns” and end conflict in Africa.
Last year, the People’s Liberation Army (PLA) registered an 8 000-member standby force with the UN. 

While remaining at home in China, these troops have completed peacekeeping training and are available for operations.
The UN says 800 of them will join its new Vanguard Brigade, a rapid response unit. 

Beijing also has committed to provide police and helicopter squads and demining assistance, and to train 2 000 foreign peacekeepers. 

Last fall, Chinese production companies even worked with the PLA’s Political Department to launch a new television series called “Peacekeeping Infantry Battalion”, to dramatise the lives of Chinese blue helmets in Africa. 

These initiatives reflect a welcome interest in reforming and improving UN peacekeeping.
A more controversial sign of China’s military footprint is the 36-hectare Djibouti facility that the PLA established in 2017 with a ten-year lease at $20-million annually. 

The PLA describes it as a support base for naval anti-piracy operations in the Gulf of Aden, peacekeeping in South Sudan and humanitarian and other cooperation in the Horn of Africa, but has also used it to conduct live-fire military exercises.
In line with China’s 2015 defence white paper and counter-terrorism law, the Djibouti base enables the PLA to project force and protect Chinese citizens, supply chains and other interests in Africa and along its “Maritime Silk Road” across the Indian Ocean.
With those objectives in mind, in May 2018 China began constructing additional pier facilities at Djibouti’s Doraleh Multi-Purpose Port, which it has also helped finance. 

Many of the security pledges under FOCAC will likely draw upon Djibouti as an operational launching pad for joint exercises and training. 

As its regional role expands, the PLA would do well to communicate and cooperate more transparently with others jostling for influence around the Red Sea. 

The US, France and Japan have long had bases in Djibouti; Israel and the United Arab Emirates have bases in the Horn; Saudi Arabia also plans one; and Qatar and Turkey have both shown interest in developing Red Sea ports. 

For its part, India suspects, not unreasonably, that other Chinese bases could pop up along the Indian Ocean.

Defence and security relations
Less noticeable to outsiders but broader in impact is China’s direct defence and security cooperation with African counterparts. 

This takes place through a growing number of joint exercises, naval patrols and exchanges. 

In the first half of 2018 alone, the PLA Navy’s 27th and 28th anti-piracy escort task forces reportedly visited ports in Cameroon, Gabon, Ghana and Nigeria, while PLA units conducted drills in the same countries, and its medical teams did work in Ethiopia, Sierra Leone, Sudan and Zambia. 

Mere months after Burkina Faso’s May decision to switch diplomatic recognition from Taipei to Beijing, the PLA is already working to develop military ties that will likely emphasise counter-terrorism cooperation.
The first China-Africa Defence and Security Forum, held from June 26 to July 10 this year, marked a new, more formal and comprehensive level of dialogue. 

It brought senior military officers and officials from 49 African states and the AU to Beijing for discussions on regional security and military cooperation, and visits to PLA facilities for demonstrations of military equipment.
Like FOCAC, it leveraged Beijing’s convening capacity to build personal connections, market Chinese hardware and position China as a supportive partner.
China clearly intends to continue increasing such engagement, including through military training. 

Its Africa policy paper of 2015 proposes inviting thousands of African military officers for workshops. 

On August 30, the ministry of defence confirmed that it plans further cooperation with African countries on personnel training, logistics, peacekeeping, health care and relief operations. 

As these initiatives move forward, China’s Central Military Commission has expanded the remit and capacity of its Office for International Military Cooperation to manage them.
The 2018 FOCAC plan of action goes even further, calling for an ongoing China-Africa Peace and Security Forum and China-Africa Law Enforcement and Security Forum, and commits both sides to more intelligence sharing. 

It also pledges to support programs in consular services, immigration, justice and law enforcement, including running an annual anti-corruption course that aims to train 100 African officials by 2021.
For police, there will be more exchanges, donations of equipment and training, and formalised engagement with the African Police Cooperation Organisation. 

Chinese demand for African wildlife and its products, particularly ivory, rhinoceros horn and pangolin, drives poaching, smuggling and trafficking, the profits from which often fuel violence and organised crime across the continent. 

China’s ivory import ban, which took effect on 1 January, was a welcome and long-overdue step, but it requires enforcement. 

FOCAC has helpfully added a three-year plan under Interpol to combat such activities.
As the FOCAC commitments note, China is complementing these cooperation mechanisms with more military assistance for the AU. 

In the first major disbursement from China’s $100-million commitment, it concluded an agreement in February to provide $25-million in military equipment for the AU’s logistics base in Cameroon.
Beijing has also made small contributions to the AU’s mission in Somalia and to sub-regional organisations. 

Still, most military assistance flows directly to countries such as Angola, the Democratic Republic of Congo and Zimbabwe, where China also has significant commercial interests. 

A recent example is the $30-million training centre that China completed in February for Tanzania’s military at Mapinga.
The political and defence relationships fostered by these programs grease the wheels for weapons sales. 

Data compiled by the Stockholm International Peace Research Institute (SIPRI) shows that China has become the top supplier of arms to sub-Saharan Africa, accounting for 27% of the region’s imports over the four year period from 2013-2017, an increase of 55% over 2008-2012.
Some 22 countries in the region have procured major arms from Chinese suppliers in recent years, key among them Ghana, Kenya, Nigeria, Tanzania and Zambia. 

In June, China’s State Administration for Science, Technology and Industry for National Defence reported that Beijing now has defence industry, science and technology ties with 45 African countries. 

Given China’s particularly influential role in sales of small arms, light weapons and ammunition, it should do more to improve transparency, monitoring of end users, and cooperation with UN investigators to prevent those weapons from ending up in the wrong hands.

Drivers of Chinese engagement
There are multiple reasons for China’s growing security role and perceived need for an overarching strategy. 

One is simply supply and demand: the swelling capacity of its military and industrial base, and African governments’ interest in its relatively affordable arms, flexible financing terms and comparatively unrestricted approach, including non-interference in matters such as governance and human rights.
China’s own expanding economic interests are a further driver. 

Africa’s largest trading partner since 2009, China increasingly counts on the continent for natural resources and markets to maintain its own growth and social stability. 

Its belt and road initiative, which has metamorphosed into a global set of bilateral agreements to foster Chinese trade, investment and financing, first expanded into East Africa with infrastructure projects in Kenya and Ethiopia.
The initiative is now open to the whole continent, and the Chinese are prospecting for opportunities in West Africa. 

As the new FOCAC plan indicates, that effort is stimulating Chinese concerns about piracy in the Gulf of Guinea and terrorism in the Sahel, as well as discussion of building local capacity to counter them. Beijing intends that the security-related programs in the new action plan support the Belt and Road.
Geopolitical and propaganda priorities are a further impetus for Chinese engagement.
Moreover, roughly a million Chinese are estimated to live and work in Africa, and China’s leaders have a domestic political imperative to ensure their safety. 

Beijing has already contended with evacuations from Libya, South Sudan and Yemen, and incidents of violence and property damage elsewhere.
The 2017 Chinese blockbuster action movie Wolf Warrior II brought home a Rambo-esque fantasy version of these concerns. 

Set in a nameless African country that descends into chaos, it closes with the hubristic message that China’s government will protect its citizens wherever they go.
Geopolitical and propaganda priorities are a further impetus. 

Xi Jinping’s lofty foreign policy agenda requires portraying China as a major power that provides public goods and seeks to rebalance global governance and give greater voice to developing countries. 

FOCAC supports that narrative by showcasing China as a continental-scale partner that tends to support African positions in forums such as the UN Security Council — at least when it suits Chinese interests. 

Xi is also determined to modernise the PLA, and giving it expeditionary experience in diverse African environments advances that ambition.
China’s multilateral pledges to support African peace and security initiatives are welcome. 

But how much its overall footprint will contribute to improving stability is less certain. 

African conflicts’ multiple drivers include not only state weakness but also political exclusion, repressive leadership and politicised institutions. 

Chinese economic and political influence could exacerbate those dynamics, for example by deepening debt, enriching elites, widening disparities, fostering corruption and stifling dissent — whether or not that is the intent.
Security sector cooperation risks transferring methods and technologies from Beijing’s authoritarian playbook, in which the law and its enforcers are instruments of party and state power rather than constraints on it. 

That might help African states impose order and control, but at the cost of progress on accountable governance and human rights. 

Optimally, China and its African partners would match their laudable 2018 FOCAC pledges with efforts to address these concerns. 

Chinese and other scholars working on Africa have already floated a number of options for doing so.
First, in line with the FOCAC pledge to increase training for non-military personnel and deepen academic exchanges, China should continue improving its knowledge, talent and analytical capacity on African peace and security issues, for example through extensive field research by scholars and more participation by civilian personnel in peacekeeping.
For policy practitioners, this effort should include engagement with African and international experts and civil society representatives on topics such as conflict resolution, early warning, peace-building and response to complex emergencies. 

While such learning is likely to move the needle of Beijing’s policy only gradually, it could, over time, lead to Chinese engagement in Africa that supports the conflict prevention and resolution efforts of the UN, AU and regional bodies.
Second, the Chinese state could use its unique capacity to direct assistance, investments and loans to ensure they spread their benefits more widely, promote employment and corporate social responsibility and do not aggravate instability. 

The new China International Development Cooperation Agency established this spring could channel more assistance to challenges with security implications such as youth employment, climate change, public health and food security.
China’s policy banks could effectively fulfil the 2015 FOCAC pledge to expand special loans for small and medium-sized enterprises in Africa from $1-billion to $6-billion. 

China’s law enforcement agencies could crack down on Chinese citizens involved in criminal activities such as illegal mining and trafficking.
Finally, China could engage more transparently and cooperatively with the full spectrum of actors involved in peace and security on the continent. 

As it widens channels to African governments, the UN and AU, it should do likewise with other governments, civil society and the media.
When it comes to the US, Japan and non-governmental organisations, given current levels of mutual suspicion, such engagement may need to start with informal communication and incremental collaboration to build trust and familiarity. 

That might include sharing good practices on technocratic topics such as aid effectiveness, project implementation, and monitoring and evaluation.
If China’s stepped-up military cooperation only reinforces incumbents and strengthens African security forces, as some leaders on the continent themselves desire, that alone is unlikely to make Africa more peaceful. 

Of course, China is hardly alone in making that mistake — some Western countries have much longer histories of doing so. 

But as Beijing’s influence grows, whether it uses its clout to nudge African leaders toward accommodation with rivals and addressing the grievances underpinning instability, or simply enables their entrenchment in office, will matter ever more.

Chinese Peril

Coming soon to a military base near us: China
BY DOV S. ZAKHEIM

With China very much in mind, Congress has passed the Foreign Investment Risk Review Modernization Act, or FIRRMA, mandating the Committee on Foreign Investment in the U.S. (CFIUS) to review and, if necessary, block both foreign attempts to acquire real estate in sensitive areas and joint ventures that could involve the transfer of American technology to foreign companies.
At the same time, however, China has established its footprint in key logistical hubs worldwide and is seeking to expand it even further.
Its growing global logistical reach could pose serious national security challenges for the United States and its allies.
China has built a naval base in Djibouti, on the Horn of Africa, from which its ships have been operating since 2017. 

It financed the construction of the Sri Lankan port of Hambantota; when Sri Lanka could not repay its debts to China, Beijing obtained a 99-year lease on the port. 

At the end of June 2018, the Sri Lankan government announced that it would move the headquarters of its southern fleet to the Chinese-operated port. 

Whether this move will result in Chinese constraints upon Sri Lanka’s freedom of action remains to be seen, but it cannot be ruled out.
Yet, it is China’s increasing presence in Europe and its environs that may well be the cause of greatest concern for Washington, and should be for its allies. 

China has obtained a significant presence on the territory of four NATO allies — Greece, the Netherlands, Belgium and Germany — and almost managed to do so in a fifth. 

China capitalized on Greece’s financial crisis in 2008 to begin operating a container facility in Piraeus, the port of Athens; it since has acquired a 35 percent stake in Rotterdam’s Euromax container terminal, which can take the world’s largest container ships, as well as a 20 percent holding in Antwerp’s container terminal, one of the fastest-growing terminals in Europe. 

In July 2017, the Hamburg Port Authority awarded the construction of a new container terminal to a Chinese conglomerate.
Rotterdam, Antwerp and Hamburg are Europe’s three biggest ports.
The fifth attempt at a NATO incursion — a near-miss for China — was its attempt through the China Communications Construction Company, a state-owned enterprise, to expand and modernize three disused airfields in Greenland. 

The company asserted its intention was merely to expand tourism in the sparsely populated island. But Greenland hosts an American base in Thule, which operates systems related to missile warning and space-related missions. 

Moreover, should China deploy aircraft to these bases, its reach would extend to at least part of Western Europe. 

Not surprisingly, the Chinese bid was extremely worrying to Danish defense officials, especially since China already had sought to acquire a former American facility in Greenland, only to have the deal vetoed by the Danish government.
In fact, the Chinese attempt to win the construction contract for the three airports posed a much more difficult challenge for the government in Copenhagen. 

Denmark is responsible for Greenland’s foreign policy and national security, but Greenlanders manage their internal affairs — and the government in Nuuk considered the decision regarding the airfields to be a domestic matter. 

It was only at the eleventh hour that a Danish company was able to edge out the Chinese and come up with the winning bid.
Most recently, China has expanded its presence in the eastern Mediterranean, along NATO’s southern flank. 

In addition to operating the port of Piraeus, China now has won the right to build two facilities in Israel’s ports of Haifa and Ashdod. 

Haifa is the headquarters of the Israeli Navy while Ashdod also hosts an Israeli naval base. 

Moreover, American warships, including aircraft carriers, dock at both ports. 

China’s presence in the two Israeli ports thus would enable China to monitor not only Israeli operations and communications but, whenever the U.S. Navy is on a port visit, those of the United States as well.
Retired Israeli and American naval commanders have expressed their concerns about the awarding of these port contracts to the Chinese. 

Israel should take a lesson from the Danes and become far more active in blocking Chinese attempts to penetrate its infrastructure. 

Israel has no equivalent of CFIUS but, clearly, it needs to establish one posthaste, and do so in a manner that, like FIRRMA, has few loopholes. 

Indeed, our other NATO allies should do the same; they must close any loopholes that exist in their foreign investment laws.
Finally, Israel should reconsider the award of the contracts to China or, at a minimum, demonstrate to Washington that China will not be able to monitor American naval operations. 

Should it be unable to do so, Washington should cancel any planned port visits to Israel. 

China’s efforts to gain access to American operations and tactics is troubling enough; our allies and friends should not make it easier for Beijing.

Who is at risk from China’s Belt and Road Initiative debt trap?

China’s Belt and Road Initiative (BRI) is raising the risk of a sovereign debt default among small and poor countries
By Nikita Kwatra

China BRI will potentially span 68 countries and could have implications for each of these countries’ public debt.

Mumbai -- China’s Belt and Road Initiative (BRI) which seeks to invest about $8 trillion in infrastructure projects across Asia, Europe and Africa, has come under intense scrutiny, not least due to suspicions over China’s intent behind the ambitious project. 

A study by the Centre for Global Development, a Washington-based think tank, analyses one important consequence of BRI: debt.
While the study finds that it is unlikely that the BRI will be plagued with wide-scale debt sustainability problems, it is likely to raise the risk of a sovereign debt default among relatively small and poor countries.
The BRI will potentially span 68 countries and could have implications for each of these countries’ public debt. 

To understand these effects, the study first uses sovereign credit risk ratings and World Bank debt sustainability analysis to identify 23 of the 68 countries currently at risk of debt distress. 

For these 23 countries, the study adds the Belt and Road Initiative lending pipeline into the countries’ overall debt and debt to China as of end of 2016.
They find that eight countries could face difficulties in servicing their debt because of the Belt and Road Initiative. 

These include Pakistan, Djibouti, the Maldives, Laos, Mongolia, Montenegro, Tajikistan and Kyrgyzstan. 

Pakistan, which through the China-Pakistan Economic Corridor, serves as the centrepiece of the BRI and is by far the largest country exposed, with China reportedly financing about 80% of its estimated $62 billion debt. 

According to the think-tank, China’s case-by-case approach in dealing with debt relief in the past could prove “problematic”.
One example is China’s acquisition of Sri Lanka’s Hambantota port after the Sri Lankan government failed to service its debt.
Unlike most of the world’s other major creditors, China is not bound to a set of rules on how it addresses debtor repayment problems. 

Currently, China is only an ad hoc participant of the Paris Club, a collection of creditor nations which follow a set of rules in dealing with debtor nations. 

The think-tank advocates applying globally-accepted creditor disciplines and standards to the Belt and Road Initiative.
To do this, they recommend the World Bank and other multilateral banks work with the Chinese government to set the lending standards for the BRI projects.
Another recommendation is to establish a new creditor’s group which would maintain the core principles of the Paris Club.
To mitigate lending risks, China is also recommended to provide technical and legal support to developing countries. 

Finally, the think tank proposes that China should offer debt swap arrangements in support of environmental goals where borrowing country debt is forgiven in exchange for a commitment to an environmental objective, for instance, forest preservation.

China's debt traps

China's Silk Road project runs into debt jam
By Julien Girault
China's dictator Xi Jinping says trade with Belt and Road countries has exceeded $5 trillion

China's massive and expanding "Belt and Road" trade infrastructure project is running into speed bumps as some countries begin to grumble about being buried under Chinese debt.
First announced in 2013 by Xi Jinping, the initiative also known as the "new Silk Road" envisions the construction of railways, roads and ports across the globe, with Beijing providing billions of dollars in loans to many countries.
Five years on, Xi has found himself defending his treasured idea as concerns grow that China is setting up debt traps in countries which lack the means to pay back the Asian giant.
"It is not a China club," Xi said in a speech on Monday to mark the project's anniversary, describing Belt and Road as an "open and inclusive" project.
Xi said China's trade with Belt and Road countries had exceeded $5 trillion, with outward direct investment surpassing $60 billion.
But some are starting to wonder if it is worth the cost.
During a visit to Beijing in August, Malaysia's Prime Minister Mahathir Mohamad said his country would shelve three China-backed projects, including a $20 billion railway.
The party of Pakistan's new prime minister, Imran Khan, has vowed more transparency amid fears about the country's ability to repay Chinese loans related to the multi-billion-dollar China-Pakistan Economic Corridor.
China's "new Silk Road" envisions the construction of railways, roads and ports across the globe

Meanwhile the exiled leader of the opposition in the Maldives, Mohamed Nasheed, has said China's actions in the Indian Ocean archipelago amounted to a "land grab" and "colonialism", with 80 percent of its debt held by Beijing.
Sri Lanka has already paid a heavy price for being highly indebted to China.
Last year, the island nation had to grant a 99-year lease on a strategic port to Beijing over its inability to repay loans for the $1.4-billion project.

Ambiguous partner
"China does not have a very competent international bureaucracy in foreign aid, in expansion of soft power," Anne Stevenson-Yang, co-founder and research director at J Capital Research, told AFP.
"So not surprisingly they're not very good at it, and it brought up political issues like Malaysia that nobody anticipated," she said.
"As the RMB (yuan) becomes weaker, and China is perceived internationally as a more ambiguous partner, it's more likely that the countries will take a more jaundiced eye on these projects."
The huge endeavour brings much-needed infrastructure improvements to developing countries, while giving China destinations to unload its industrial overcapacity and facilities to stock up on raw materials.
Chinese dictator Xi Jinping (C) says the initiative is 'not a China club'

But a study by the Center for Global Development, a US think-tank, found serious concerns about the sustainability of the sovereign debt in eight countries receiving Silk Road funds.
Those were Pakistan, Djibouti, Maldives, Mongolia, Laos, Montenegro, Tajikistan and Kyrgyzstan.
The cost of a China-Laos railway project—$6.7 billion—represents almost half of the Southeast Asian country's GDP, according to the study.
In Djibouti, the IMF has warned that the Horn of Africa country faces a "high risk of debt distress" as its public debt jumped from 50 percent of GDP in 2014 to 85 percent in 2016.
Africa has long embraced Chinese investment, helping make Beijing the continent's largest trading partner for the past decade.
On Monday, a number of African leaders will gather in Beijing for a summit focused on economic ties which will include talks on the "Belt and Road" programme.

'Not a free lunch'
China bristles at criticism.
Sri Lanka has already paid a heavy price for being highly indebted to China

At a daily press briefing on Friday, foreign ministry spokeswoman Hua Chunying denied that Beijing was saddling its partners with onerous debt, saying that its loans to Sri Lanka and Pakistan were only a small part of those countries' overall foreign debt.
Stevenson-Yang said China's loans are quoted in dollar terms, "but in reality they're lending in terms of tractors, shipments of coal, engineering services and things like that, and they ask for repayment in hard currency."
Standard & Poor's said Beijing structures the infrastructure projects as long-term concessions, with a Chinese firm operating the facility for a period of 20 to 30 years while splitting the proceeds with the local counterpart or government.
The head of the International Monetary Fund, Christine Lagarde, raised concerns about potential debt problems in April and advocated greater transparency.
"It's not a free lunch, it's something where everybody chips in," she said.

The Necessary War

China training pilots to target US

By Ryan Browne and Ben Westcott

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

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

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.

China's Debt Traps

Chinese 'highway to nowhere' haunts haunts Montenegro

By Noah Barkin, Aleksandar Vasovic

A worker hides from the sun on the Bar-Boljare highway construction site in Klopot, Montenegro June 11, 2018. 

PODGORICA -- Perched atop massive cement pillars that tower above Montenegro’s picturesque Moraca river canyon, scores of Chinese workers are building a state-of-the-art highway through some of the roughest terrain in southern Europe.
The government has described the 165 km (103 mile) highway, with its imposing bridges and deep-cut tunnels, as the construction of the century and a pathway to the modern world.
It is designed to link the port of Bar on Montenegro’s Adriatic coast to landlocked neighbor Serbia. But once the first, challenging 41 km stretch through mountains north of the capital is completed, the government faces a difficult choice.
A Chinese loan for the first phase has sent Montenegro’s debt soaring and forced the government to raise taxes, partially freeze public sector wages and end a benefit for mothers to get its finances in order.
Despite those measures, Montenegro’s debt is expected to approach 80 percent of gross domestic product (GDP) this year and the International Monetary Fund says the country cannot afford to take on any more debt to finish its ambitious project.
“There is a big question about how they complete it,” said an EU official who requested anonymity. “Their fiscal space has shrunk enormously. They have strangled themselves. And for the time being this is a highway to nowhere.”
The road is at the heart of an intense debate about Chinese influence in Europe, both within EU member states and countries aspiring to join the bloc such as Montenegro and its Western Balkan neighbors Serbia, Macedonia and Albania.
As Beijing extends its economic reach under the ambitious Belt and Road Initiative (BRI), poor countries across Asia and Africa have seized on attractive Chinese loans and the promise of transformative infrastructure projects.
This has allowed them to develop in ways that may not have been possible without access to China’s vast foreign exchange reserves. 

But some countries, such as Sri Lanka, Djibouti and Mongolia, have found themselves weighed down by debt and ever more reliant on Beijing’s largesse.
Montenegro is the first country in Europe to find itself in this position as its government presses on with its dream of a gleaming new highway to lead the nation to a brighter future.
“This highway is a big deal in Montenegro. It reminds people of Tito and the days of grand socialist projects in the region,” said academic Mladen Grgic, referring to former Yugoslavia’s long-time communist leader Josip Broz Tito.

“But it’s a trap. Now that it’s been started, the politicians can’t stop it – no matter how harmful it might be. And frankly they don’t want to,” said Grgic, author of a 2017 study on the highway.

‘NOT BANKABLE’
The idea of building a highway from the coast to Serbia can be traced back to 2005, a year before Montenegro’s vote for independence from its neighbor. 

The project was championed by Milo Djukanovic, who has served as president or prime minister of Montenegro nearly uninterrupted since 1991.
The government hopes the highway will give an economic boost to the country’s underdeveloped north, bolster trade with Serbia and improve road safety as Montenegro’s narrow, winding mountain roads are notoriously dangerous.
Having recognized that there is little scope to take on more debt, the government’s options for building the next three phases of the highway are limited.
The option it now favors is a public private partnership (PPP) in which an outside partner would build and operate the highway, then run it under a concession from the state for 30 years to get a return on their investment.
China Road and Bridge Corporation (CRBC), the large state-owned Chinese company that is building the first section, signed a memorandum of understanding (MOU) in March to complete the rest of the road on a PPP basis.
But European lenders worry that Montenegro would need to offer costly revenue guarantees to make that work, potentially deepening its financial woes.
“We told them that their PPP model was not bankable, that they would be taking on risks they don’t know how to manage,” said an official from the European Investment Bank (EIB), the European Union’s lender.

A bridge construction site of the Bar-Boljare highway is seen in Bioce, Montenegro June 07, 2018. 

The IMF cautioned the government in May against a PPP solution that could introduce large contingent liabilities. 

One official suggested Montenegro would be better off waiting until it joined the EU before finishing the highway.
Once it is part of the EU, Montenegro would have access to more structural and cohesion funds from Brussels. 

But the process of joining the bloc could take a decade or more, despite a loose target date of 2025 floated by the EU this year.

FEASIBILITY STUDIES
Doubts about the highway surfaced after two feasibility studies, conducted in 2006 and 2012, showed it was not economically viable.
Reuters reviewed copies of the studies, the first carried out by French firm Louis Berger for the Montenegrin government, and the second by U.S. company URS for the EIB. 

Both concluded there would not be enough traffic to justify a concession.
Louis Berger estimated the government would have to pay 35 million to 77 million euros a year in subsidies to make a toll-based system attractive to outside investors.
URS looked at each section of the highway and concluded that all possible combinations were economically unworkable. 

It recommended a more modest upgrade of existing roads.
“The low current traffic volumes and the weak economic forecasts mean that the economic benefits of the proposed route do not provide adequate return on the investment,” URS said.
To justify the grand highway envisioned by the Montenegrin government, URS said internal rates of return of 8 percent would be required but it estimated they would be below 2 percent.
Ivan Kekovic, an engineer who was involved in the project in its early years but later issued an open letter to parliament warning against it, told Reuters that average traffic of 22,000 to 25,000 vehicles a day would be needed to justify a highway of the proposed scale.
Daily traffic on the busiest stretch, from the capital Podgorica to the port of Bar, is less than 6,000 vehicles.
Early attempts to build the highway, first with a Croatian consortium and then with a Greek-Israeli one, collapsed after both groups failed to provide bank guarantees in time.
Critics breathed a sigh of relief, convinced the project was dead. 

Then China appeared on the scene.

CHINA FILLS VOID
Economics professors at the University of Montenegro were paid by the state-funded Export-Import Bank of China to conduct a new feasibility study.
This one found the highway was viable, according to the government. 

But this study has never been made public and attempts by Reuters to see it were unsuccessful.
China Communications Construction Co., CRBC’s parent firm, did not respond to a request for comment about the studies.
MANS, an EU-financed anti-corruption watchdog, pressed the government to provide members of parliament with data to support its vision before a vote to approve the highway in 2014. 

It refused.
“We have no doubt that the data that the ministry of transport used in order to justify the construction of the highway are fabricated,” said Dejan Milovac, deputy executive director at MANS.
The government denies manipulating the numbers and says the highway will deliver long-term economic and social benefits that prove the skeptics wrong.
Zorana Mihajlovic, deputy prime minister of Serbia, which is building a stretch of highway with Chinese help to link with the Montenegrin road, took a similar view.
“There are investments that may not be economically justifiable from a short-term perspective, but which are strategically important,” she told Reuters.
The six Western Balkan countries – Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Montenegro and Serbia - are surrounded by EU member states. 

But the region has suffered from under-investment and poor governance since the independence wars of the 1990s, making it an economic laggard.
Over the past decade, as the EU struggled with a succession of crises and put enlargement of the bloc on hold, other powers, including Russia and Turkey, have moved in to fill the void.
China has been especially active. 

In 2012, it began holding annual “16+1” summits with eastern and southern European states to discuss investment opportunities, infuriating Brussels.
A year later, it unveiled BRI, its grand plan to secure land and maritime trade routes from Asia to Europe and Africa.
The Western Balkans, strategically positioned on Europe’s southern flank, is a key access point for China to reach central Europe and beyond.
China’s investments in the region total more than 6 billion euros -- including highways, rail lines and power plants. 

Serbia, the largest economy in the region and Beijing’s long-standing ally, has received the lion’s share.
Montenegro could be attractive to China for a number of reasons. 

It gives Beijing a port of entry into Europe from the Adriatic, and close economic and political ties with the government in Podgorica could prove valuable for China if Montenegro becomes an EU member.

‘DISBELIEVERS’
The 809 million euros Montenegro received from China’s Export-Import Bank covers 85 percent of the cost of the first section of the road.
The dollar-denominated loan carries a 2 percent interest rate, 20-year repayment schedule and 6-year grace period – attractive terms but a major long-term burden for a country of roughly 620,000 people.
Under the terms of the contract, an arbitration court in China would have jurisdiction in the event of any legal dispute. 

CRBC won commitments that all imported construction materials, equipment and other goods be exempt from customs and value-added tax. 

Chinese workers were given 70 percent of the work.
Some 3,605 workers are busy building the first section of the highway. 

Roughly two-thirds of them are from CRBC, one of the largest engineering and construction firms in the world.
Four camps of neat blue-roofed bungalows house the Chinese workers. 

Dotting the area are billboards in Chinese and English exhorting them to be meticulous and responsible.
“CRBC expects to build the future sections of this project,” Kang Shifei, deputy project manager for CRBC, told Reuters on a blazing hot afternoon in June, beneath the giant pillars that will support a kilometer bridge above the Moraca canyon.
Because the government did not hedge against currency swings and omitted a vital turnpike from its original blueprint, the cost has continued to rise. 

It is now approaching 1 billion euros, nearly a quarter of Montenegro’s GDP.
A March report from the Washington-based Center for Global Development which examined the debt risks associated with BRI listed Montenegro as one of eight highly vulnerable countries, alongside Djibouti, the Maldives, Laos, Mongolia, Tajikistan, Kyrgyzstan and Pakistan.
The remaining three-quarters of the highway will plow through less mountainous terrain. 

The IMF estimates it will cost another $1.2 billion to complete.
Prime Minister Dusko Markovic has said it will be finished at any cost and promised to deepen cooperation with China in other areas, including hydropower and tourism. 

He has dismissed critics as “disbelievers”.
But opposition politicians are worried – about the country’s finances and about China’s role.
Dritan Abazovic, head of the United Reform Action opposition party, said it was normal for an economic power such as China to seek a role in the region, alongside the EU, United States and Russia.
But because of the scale of the project, he worries the deal with the Chinese will end up giving Beijing much more influence over Montenegro.
“It puts the Chinese in a very very comfortable position,” he said.