China’s “one road” to global power?

August 9, 2017

Khury Petersen-Smith looks at China's "One Belt, One Road" infrastructure initiative and asks whether it will be a highway to further economic and political power.

AT THE beginning of this decade, China overtook Japan to become the world's second-largest national economy, and its increasing rivalry with the only country with a larger economy, the U.S., has been one of the major stories in world politics in all the years since.

China's rise as a global manufacturing powerhouse is well known--but it is now rolling out its most ambitious and assertive economic initiative yet: One Belt, One Road.

One Belt, One Road (OBOR, also known as the Belt and Road Initiative, or BRI) is a project that establishes new infrastructure paths over land and sea to facilitate Chinese imports and exports with the world via Southeast Asia, South Asia, Africa and Europe.

Advanced by Chinese premier Xi Jinping, who pledged an initial $124 billion--the equivalent of the total economic output of Hungary for a year, and that's just China's first round of investment--at a summit launching the initiative in Beijing this May, OBOR would create a network of roads, railways, ports and other facilities linking commerce across 68 countries.

A steel mill in China's Liaoning province
A steel mill in China's Liaoning province (Andreas Habich | Wikimedia Commons)

The plan, whose conservative estimated total cost is around $900 billion, would involve a "Eurasian land bridge" connecting the east coast of China with Rotterdam in the Netherlands ("One Belt")--and sea routes and facilities to link ports in China and Indonesia with those in South Asia, East Africa, and Mediterranean Europe ("One Road").

The infrastructure megaproject has multiple economic purposes. It would streamline the import of raw materials from outside of China, transporting them to industrial centers. As the manufacturing center of the world, it's obvious why China would seek to enhance its ability to export.

Another critical purpose of OBOR is the hope that it will solve China's overcapacity in heavy industrial goods, such as iron, steel, aluminum, cement and glass.

China's rise as an economic powerhouse led to rapid economic expansion, fueled by producing consumer goods for foreign markets--and in the process, the country underwent a spectacular process of urbanization. When the 2008-09 global economic crisis caused a sharp drop-off in foreign demand, the economy was directed inward in an effort to soak up supply domestically, through massive state spending.

All these dynamics produced a construction boom in China whose proportions are so large that they are difficult to appreciate. Between 2011 and 2013, for example, China used more cement than the United States did in the entire 20th century.

The construction boom was meant to house and provide amenities for millions of people moving to cities, but it also involved the overproduction of building materials and waste typical of the capitalist boom-and-bust cycle anywhere in the world, but on a vast scale. The waste was embodied dramatically in China's "ghost cities"--newly constructed urban and suburban areas with few or no residents. Several provinces have managed to lure enough residents to begin to fill some of the ghost cities, but the problem of overcapacity remains acute.

Thus, one aim of One Belt, One Road is to provide a foreign outlet for goods that the domestic market cannot absorb. The construction of infrastructure as part of OBOR is meant, in and of itself, to put a dent in overcapacity, too. Once these facilities are built, according to the plan, "development" projects in Southeast Asia's expanding economies will continue to draw on China's pool of goods.

According to an official from the Overseas Chinese Affairs Office of the State Council, writing in the South China Morning Post, "In the short term, benefits will be derived from infrastructure construction. Medium-term benefits will accrue from expanded trade opportunities. Long-term dividends will be reaped from greater economic growth based on sound infrastructure in ASEAN countries."

The Economic Is Political

WHILE OBOR has major implications for the Chinese and world economies, it isn't simply an economic initiative.

The project is the latest step in China playing more of an assertive role in world politics. Indeed, China's economic superpower status has been the key vehicle to becoming more of a player on the world stage--and a competitor to the U.S. and other powers in the so-called "development" of other countries.

China's launch of the Asian Infrastructure Investment Bank (AIIB) in 2014 created a fairly explicit competitor to the World Bank and International Monetary Fund--the institutions of global finance and economic governance that the U.S. developed during the Cold War to pull the "Third World" into its orbit and discipline economies of the Global South by consigning dozens of countries to debt servitude.

Speaking about the AIIB with dread in 2015, former Treasury Secretary Lawrence Summers told National Public Radio, "We're contemplating a major institution in which the United States has no role, that the United States made substantial efforts to stop--and failed."

So not only has China stepped in as an alternative financier of debt-amassing, community-displacing and environment-devastating infrastructure projects in Asia, Africa, and Latin America, it has done so with the clear aim of involving itself in the politics of places where it's investing.

Perhaps the most dramatic example of this was the Chinese finance and construction of the African Union's headquarters in Addis Ababa, Ethiopia. The entire $200 million project was paid for by China, and gifted to the AU.

Overall, OBOR takes China's growing profile on the world stage--and its rivalry with the U.S. in particular--a step further.

The project excludes the U.S. in a way that is new. Previous Chinese initiatives like the AIIB and Shanghai Cooperation Organization didn't invite U.S. involvement and were meant to counter U.S.-aligned financial institutions, military alliances and the Trans-Pacific Partnership, a U.S.-led economic initiative that specifically excluded China. These projects, however, were regional in scope.

One Belt, One Road has a global reach, developing a new trade network that spans regions and continents--and conspicuously leaves out the U.S.

China's Response to Trump

DONALD TRUMP'S ascent to the throne in the U.S. has provided more opportunities for China to play a leadership role for the capitalist states of the world.

The nationalism of Trump's campaign slogan to "Make America Great Again" expresses a debate within the U.S. ruling elite. The U.S. ascended to superpower status through an extensive system of military violence and the construction of an infrastructure of global political and economic governance, with itself at the center. Washington used those structures to politically and economically underwrite states around the world, provided they comply with U.S. interests.

Trump's promise to put "America first," his effective scrapping of the Trans-Pacific Partnership, his contempt for multilateral accords like the Paris Agreement on fossil-fuel emissions, and his disinterest in the timeworn and hypocritical tradition of American presidents paying lip service to the ideals of democracy and human rights as guides for foreign policy--all of these are a shift in U.S. imperial strategy, reflecting skepticism about the previous model of domination among at least a section of the ruling class.

On the other hand, Trump's bombing of Shayrat Syrian Arab Air Force base in Syria--supposedly a humanitarian response to dictator Bashar al-Assad's use of chemical weapons in his ongoing siege of the population--show there are those in his administration with the view that U.S. imperialism shouldn't simply walk away from the infrastructure and ideology of its rule it has built up over more than a century.

As these debates play out in the U.S. ruling class, China has been increasingly able to step in and position itself as a responsible and stable leader for world politics and economics.

At the most World Economic Forum (WEF) summit in Davos, Switzerland in January, for example, Xi Jinping put forward China as the world defender of free markets in the wake of the Brexit vote and in anticipation of a protectionist Trump administration. WEF founder and chairman Klaus Schwab introduced Xi by saying, "In a world marked by great uncertainty and volatility the world is looking to China."

In Xi's speech, he responded to Trump's "America First" rhetoric by comparing protectionism to "locking one's self in a dark room" and declaring that "no one will emerge as a winner in a trade war."

The response of the world's political and economic elite in Davos was enthusiastic. Former Swedish Prime Minister Carl Bildt reacted to the speech on Twitter with the comment: "There is a vacuum when it comes to global economic leadership, and Xi Jinping is clearly aiming to fill it. With some success."

The construction of OBOR is part and parcel of the assertion of China's geopolitical leadership.

Not a Smooth Road

THOUGH THE wind may be in China's sails at the moment, carrying out OBOR will not be easy. Aside from the countless logistical problems with networking infrastructure in nearly 70 countries, there are the even more complicated political ones.

One component of OBOR, for example, is the China-Pakistan Economic Corridor (CPEC), with $55 billion proposed in spending on railways, power plants, ports and other infrastructure for Pakistan. Part of CPEC involves construction in Pakistan-occupied Kashmir, which concerns India--Pakistan's bitter rival and also an occupier of Kashmir. China's entanglements in the India-Pakistan conflict--and in particular, the issue of Kashmir--led India to boycott the launch celebration of OBOR in Beijing.

Indeed, India is teaming up with Japan to compete with OBOR to carry out their own financing of infrastructure projects in Asia and Africa. Last November, the two countries' prime ministers, Narenda Modi and Shinzo Abe, launched the Asia-Africa Growth Corridor at a meeting of the African Development Bank in Gujarat.

Then there is, of course, the United States, which will respond to OBOR as the latest effort by China to challenge U.S. supremacy on the world stage.

In an August 2 press conference darkly hinting at the U.S.-Chinese antagonism, Secretary of State Rex Tillerson asked how the two countries could work out "differences in a way that does not lead to open conflict? We test this relationship through things like the situation in North Korea."

China has an ability to lean on North Korea that other states don't. The Trump administration can point at any reluctance on China's part to do this and question whether it is living up to its responsibility as a member of the "international community."

On the other hand, the friction between all these states and China is balanced by their economic interdependence. China is the biggest trading partner both of India and the U.S. In the world of international capitalist competition, conflict, nationalism and economic integration exist as different aspects of a single reality.

OBOR will not only face challenges from other states. As with all projects that advance neoliberal trade, the program will accentuate existing inequality in China and other countries where the project unfolds.

After all, dam construction and other infrastructure projects financed by the World Bank have produced significant resistance movements against the displacement of communities and environmental destruction--and OBOR has the potential to do the same.

Regarding the environment, China postures on the need to reverse climate change. Its actual track record on mineral extraction and the construction of ecologically destructive dams, however, show that the state prioritizes expanding the Chinese economy and its involvement in economies around the world--and OBOR is set to continue those dynamics.

Thus, OBOR may produce struggle from below. Chinese workers are already leaders of the international class struggle with their incredible strike activity, and this figures to increase as China continues to restructure its economy.

This resistance represents hope in a world of growing inequality. If capitalists around the world salivate at what OBOR can do for international commerce--or fear how it will boost geopolitical rivals--we need to take the occasion of this initiative to discuss how we can build greater international workers' solidarity.

Thanks to Eric Ruder and Charlie Hore for their contributions to this article.

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