During a visit to Kazakhstan in 2013, President Xi Jinping proudly announced the launch of the Belt and Road Initiative (BRI). This multi-trillion-dollar infrastructure project seeks to create an economic belt and maritime "silk road" that connects China to over sixty countries in Eurasia and Africa. The BRI aims to fund infrastructure projects such as highways, railways, seaports, airports, and oil refineries. Since its launch, China has been accused of enforcing neocolonialism through the BRI. By using the Hambantota Port and Colombo Port City project in Sri Lanka, I will argue that although China may have demonstrated neocolonialist intentions, partnering countries are equally responsible when making BRI project deals and can combat neocolonialism through negotiation. To expand off that, this piece argues that the BRI is not so much an example of neocolonialism as it is economic regionalism.
The Belt and Road Initiative could potentially economically integrate several developing countries in the Asian region and beyond. But what's in it for China? The policy goals of the initiative include enhancing communication between foreign governments, implementing hard and soft infrastructure, strengthening cultural ties, and promoting regional cooperation. Hard infrastructure includes building transportation, networks and power grids, while soft infrastructure includes creating regulatory standards and trade deals. Cultural ties refer to sustaining intellectual and cultural exchanges, as well as tourism. The BRI would economically integrate countries within the Asian region by having fewer trade tariffs and standards for China when trading goods with partnering countries.
Because the concept of neocolonialism is interpreted in numerous ways, it is essential to first define it. The first Prime Minister and President of Ghana, Kwame Nkrumah, argues that neocolonialism has emerged as a substitute for traditional colonialism, where hegemonic powers exploit developing countries as colonies. Neocolonialism occurs when the economic and/or political system of an independent state is manipulated by another state. In other words, an outside state gains control over another state through "economic and monetary means," In neocolonialism, a state gaining economic control through the banking system or private industry is the start of foreign control over government policy. Nkrumah claims that because of this, the outside state uses the neocolonial state for exploitation rather than genuinely developing the state.
It is widely discussed that the BRI is neocolonialist because of its infamous "debt trap." A debt trap is a form of predatory lending in which a borrower is not able to pay their debts, so they continue to borrow until it becomes a cycle. It is often caused by high-interest rates. Akshan DeAlwis, John Jay Scholar at Columbia University, argues that the economic goals of the BRI are a facade, and by using the debt trap, China would be able to establish a military presence in the Asian region. DeAlwis further discusses non-economic factors of the BRI. He argues that China is trying to exert dominance through this opportunity to destroy local economies. DeAlwis also mentions the "String of Pearls" theory, which proposes that China is planning to develop overseas naval bases along the Indian Ocean to expand military forces in order to become a regional global power quicker than its rival power, India.
China has made several deals with Sri Lanka through the BRI, and the two most prominent projects are the Hambantota Port and the Colombo Port City Project. These projects have demonstrated that partnering countries are equally responsible when making deals with China.
It is important to acknowledge that the host country is also responsible for its actions when making deals with BRI projects. In China's Asian Dream, author Tom Miller visited Sri Lanka to discuss China's involvement in projects under the government of Mahinda Rajapaksa, who went out of power by the January 2015 election. From 2009 to 2014, China financed almost $5 billion in ports, roads, bridges, railways, an international airport, and a coal-fired power station. This $5 billion loan, however, came at a high interest rate. Other multilateral banks and national banks, such as Japan's, typically offered lower interest rates. Ravi Karunanayake, Sri Lanka's Minister of Finance, stated that the high-interest rates by China's banks came from corruption on China's part, but also Mahinda Rajapaksa's corrupt regime of the past. Once Maithripala Sirisena's administration took over in 2015, it made sure to hold China accountable for its actions by suspending the Colombo Port City project. The project was suspended due to legal issues over land, the project's financing, and environmental effects. Karunanayake clearly states "'We mean business when we say we want clean, transparent, good governance... perhaps Chinese companies had to be corrupt in the past, but if they do that now they will be disqualified.'" When current President Sirisena visited Beijing, he blamed the previous regime for the issues that Chinese banks faced with the projects. Sirisena's administration renegotiated loan repayments with Chinese banks, lowering the interest rate and including additional environmental protections.
China's neocolonialist intentions and the String of Pearls theory can be disproved by Sri Lanka's Hambantota Port project on the southeast coast of Sri Lanka. Dr. Natalie Klein, author of Maritime Security and the Law of the Sea, states that the Hambantota port is a commercial port and that BRI deals are commercial deals and loans, emphasizing that there is a difference between a commercial port and a military base. Klein continues to argue that the coastal state in which the port resides in is the one who has authority, regardless of who operates the port. This law has been established by the United Nations Convention on the Law of the Sea (UNCLOS). China cannot move forward with its projects without the acceptance of the host country. Therefore, Klein believes that no matter how big foreign investment is in a port, the coastal state still has control.
The Hambantota Port project has sparked controversy within Sri Lanka because of China's debt trap and the fear of China using the port for military purposes. Hambantota was historically a Sri Lankan naval base but has switched into a port that has been built and now controlled by China. The port is under a 99-year lease to China Merchants Port Holdings for $1.12 billion. Because of this, there have been rallies conducted by the Sri Lankan public, fearing that China would use the port for their military to gain more influence on Sri Lanka as well as get closer to India, China's rival. Despite popular fears, the port deal has a clause that clearly states that the port cannot be used for military purposes. Additionally, Prime Minister Ranil Wickremesinghe's office stated that the Sri Lankan government has informed China that they are prohibited from using the port militarily, as the port is still under the control of the Sri Lankan navy.
Sri Lanka has planned to create economic opportunity and jobs back to Colombo, its capital city. Through the BRI, the Sri Lankan government made a deal with the China Harbour Engineering Company to construct a $1.4 billion Port City development. The Colombo Port City would be used as an urban center for residential and commercial use. Bendix further explains that the China Harbour Engineering Company aims to add about 17 billion gallons of sand along the coast of the city, which has sparked concern from the Sri Lankan government due to environmental issues. Because of this concern, the project was suspended in 2014 by Prime Minister Ranil Wickramasinghe. Though this angered the China Communications Construction Company, the project's investor, the Sri Lankan government, and the China Communications Construction Company were able to continue the project after new environmental protections were implemented. The China Harbour Engineering Company had to obtain a permit to dredge about 3 miles out the coastline and at a depth of slightly less than a mile, and the company was not allowed to dredge near reefs and fishing grounds. Last, the company had to put aside $7 million in reparations to fishing associations considering the project's economic cost to local fishermen.
Stepping aside from Sri Lanka, the BRI has demonstrated a sense of cooperation when creating policies for the initiative. Many of the BRI's core tenants are consistent with international rules that have been written into the United Nations (UN), Group of Twenty (G20), the Asia-Pacific Economic Cooperation (APEC), and other international and regional organizations. Additionally, China signed about 170 cooperation documents with 150 countries and international organizations. The BRI also promotes financial connectivity by supporting the Guiding Principles on Financing the Development of the Belt and Road with 27 countries. Lastly, the People's Bank of China co-financed more than 100 projects in 70 countries and multilateral development institutions, which involves numerous nations acting together.
After analyzing two of Sri Lanka's significant BRI projects, it can be concluded that the BRI is not so much neocolonialism, rather it is economic regionalism. Economic regionalism pertains to the liberalization of trade between neighboring countries in the same geographic region. The most important tenet of trade liberalization is economic interdependence, which intertwines national markets, making countries wealthier and raising the cost of war with their trade partners. Amitav Acharya, a scholar and author of The End of American World Order, discusses the emergence of regionalism within the changing international system. He states that emerging powers, such as China, take part in the world of interconnectedness and interdependence by focusing on initiatives based on infrastructure and economic strategy rather than trade and political strategy. Local and regional initiatives like the BRI are the future to this international system.
China's President Xi Jinping spoke against protectionism in a 2017 speech in Davos, and Chinese policymakers, such as current Vice-Minister of the Ministry of Foreign Affairs He Yafei, have also spoken in favor of globalization. Additionally, in a 2016 Pew Survey, 60 percent of the Chinese public thought that being involved in the global economy is positive. On April 25 to 27 of 2019, President Xi Jinping held the second Belt and Road Forum in Beijing, welcoming leaders from 37 countries and delegates from 150 countries. President Xi Jinping discussed concerns raised by the United States over the BRI, trade, and infrastructure. He additionally addressed China's commitment to open its economy, enhance the interests of partnering countries, and implement environmental protection to BRI projects. China has made an effort to calm the fears of nations like Sri Lanka and the United States, advocating for economic liberalization and more particularly regionalism, as it would most strongly connect the Asian region. After decades of being closed off from the world, China has opened itself up to connect with neighboring countries and promote trade and infrastructure development, which benefits not only China but its neighbors as well.