The Future of China’s Belt and Road
Indonesia’s election; Kim meets Putin; Taiwan Strait confusion
The Big One.
Where is China’s Belt and Road Initiative headed?
The final days of April saw China host the second Belt and Road Forum in Beijing. Unlike the first forum, this year’s comes after a sustained period of friction between China and various BRI debtors around the world. Moreover, the United States has made overt criticism of China’s overseas financial practices a regular habit. See, for instance, this video produced by the U.S. State Department’s Bureau of International Information Programs, on China’s “debt trap” diplomacy. Evidently, Washington felt it necessary to counter-message Beijing right as the BRF got underway.
Just how significant was this year’s BRF? According to The Diplomat’s Shannon Tiezzi’s count of attendees, 36 foreign heads of state and government attended. The map below showcases the countries that sent their leaders to the second BRF.
That’s a respectable attendance level. The 2017 inaugural BRF was attended by 30 world leaders, including Chinese President Xi Jinping.
The core purpose of the BRF remains the same as it was in 2017: it’s a celebration of Xi’s signature foreign policy initiative, one that was even elevated into the Communist Party of China’s constitution at the 19th Party Congress in 2017. The BRF is the highest-profile diplomatic event that China will convene on its soil this year and continues the project that Xi has undertaken since 2017: demonstrating that China can play a positive role as a supplier for much-demanded financing the world over.
But the darker side of the BRI loomed large over this year’s meeting. A little more than five years since the inception of the “belt” and the “road” in late 2013, debt renegotiations have become widespread, project implementation remains wanting, and skepticism over the strategic side-effects of the BRI are growing. The United States, Japan, India, and, more recently, some of the largest states within the European Union have intensified their public criticisms in the meantime.
The second BRF raises questions about where the initiative may go from here. New research from the Rhodium Group arrives at the following conclusion regarding the current financing models favored by China: “Until a more sustainable model for project financing is advanced by Beijing, key political and economic questions surround China’s handling of bad debt renegotiations, both now and in the future.” Indeed, even as Western countries grow more critical of the BRI, there are signs that the basic approach to financing may slowly change to match the realities many debtor countries are facing. Barring any major structural economic shock within China, total external loans may even decrease in the coming years.
Bottom Line: China’s largest diplomatic event of the year, the Belt and Road Forum, just held its second-ever meeting. The future may not be so rosy.
Counter conventional wisdom: Writing in the New York Times, Deborah Brautigam makes the case that Beijing’s perception as the world’s “loan shark” is widely overstated: “But the idea that the Chinese government is doling out debt strategically, for its benefit, isn’t supported by the facts.”
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East Asia.
For the first time since his state visit to Vietnam, which coincided with the second U.S.-North Korea summit meeting, Kim Jong Un traveled abroad. In the penultimate week of April, Kim traveled by train to the far-eastern Russian city of Vladivostok for his first meeting with Russian President Vladimir Putin.
The Kim-Putin summit was always going to happen. North Korea had given off particularly strong indicators in the days immediately after the Hanoi summit that it was courting Russia. Throughout 2018, even as Kim had met South Korean President Moon Jae-in, U.S. President Donald J. Trump, and Chinese President Xi Jinping, he had yet to meet with Putin—the only leader of a bordering country that went without a summit that year.
Russian scholars Anna Kireeva and Liudmila Zakharova offer takeaways from the summit in The Diplomat, with their core observation being that the summit suggested that Moscow “could play a stabilizing role and help promote détente on the Korean peninsula.” For Putin, that’s indeed what the summit did: it positioned Russia at the center of the Korean Peninsula discussion. Putin has called for the long-dead Six-Party Talks to reconvene to peacefully resolve the nuclear issue on the Peninsula.
For Kim Jong Un, the summit with Putin, beyond the additionally international prestige value, may have been disappointing. Most significantly, Putin did not give off any indication that Russia had come around to North Korea’s position on United Nations Security Council sanctions relief—the core demand from Pyongyang at the Hanoi U.S.-DPRK summit. Putin noted at a press conference in Vladivostok that he and Kim had discussed sanctions, but said little else about the content of their discussions.
This was especially odd given Russia’s assent to a working-level trilateral Russia-China-North Korea statement last November calling for the “adjustment” of international sanctions against North Korea. Kim left with a personal rapport with Putin that may come to be valuable in the future, but the summit wasn’t a watershed for North Korea’s general position.
Putin did have choice words on the definition of “denuclearization,” indicating that, unlike the U.S. administration’s seeming understanding, the word called for both the United States and North Korea to take actions. Read his full press conference transcript here.
Bottom Line: Kim Jong Un met Vladimir Putin, but he may not be any closer to getting what he really wants: sanctions relief.
South Asia.
For the first time since 2014, the leader of the Islamic State, Abu Bakr al-Baghdadi, appeared on video. During his appearance, in an attempt to make clear that the video was recent, he made clear that the attackers that struck churches and hotels across Sri Lanka on Easter Sunday in April were Islamic State fighters. The attacks have rocked the island country, just weeks before the 10th anniversary of the end of its 25-year civil war.
There’s more to say about the Sri Lankan attacks than can be accommodated in this newsletter, but what’s been striking is the role the ongoing political dysfunction in Colombo had in contributing to the spectacular intelligence failure that allowed these attacks to take place in the first place. Some readers may recall that last autumn, Sri Lanka found itself in the throes of a major constitutional crisis when the country’s president, Maithripala Sirisena, declared outright war on the prime minister, Ranil Wickremesinghe, by unconstitutionally dissolving his cabinet and appointing the former strongman President Mahinda Rajapaksa prime minister.
Even as that crisis found resolution, Wickremesinghe’s coterie and Sirisena’s coterie remain at loggerheads, which allowed apparently highly specific intelligence inputs from India regarding the plans for these attacks to go unheeded. Sri Lankan authorities had nearly two weeks’ notice before the attacks occurred and were unable to prevent them. The Diplomat’s Siddharthya Roy and Stephanie Rose Justin suggest that Sri Lankan military may have even slow-rolled its response to make the government look bad. The crisis has yet to conclude, with the U.S. Embassy in Sri Lanka warning that it still believes that affiliates of the Easter attackers remain at large and may be planning further attacks.
For more on the geopolitical implications of the Sri Lanka Easter Day attacks, listen to my recent podcast discussion with The Diplomat’s Prashanth Parameswaran.
Bottom Line: Sri Lanka’s Easter tragedy is a reminder of the effect political dysfunction can have on effective, preemptive counterterrorism.
Southeast Asia.
Indonesia’s election, the largest single-day exercise of democracy anywhere in the world, wrapped up on April 17, with the incumbent, President Joko “Jokowi” Widodo, winning a second term. Prabowo Subianto, his opponent, tried to cling on to the hope of victory by refusing to concede immediately. The Indonesian Supreme Court has rejected Prabowo’s challenge to the official election results and it appears unlikely that there’ll be lasting instability from his challenge. (See a good summary of his legal challenge here from The Conversation.)
Even with the opposition’s complaints, the election was peaceful, proving concerns about growing Islamic radicalization in Indonesian politics misplaced. Indonesian authorities took security seriously. As Nithin Coca explained in The Diplomat, “Part of [the reason for stability] was the ability to learn from past experiences, both domestically and abroad, and be prepared.”
Jokowi is likely to continue on with the policies that defined his first term, both within Indonesia and in terms of the country’s foreign policy. As Edward Parker noted, that will include a heavy focus on the economy, continuing Jokowi’s emphasis on infrastructure spending, social welfare programs, and efforts to turn Indonesia into a manufacturing powerhouse. As Parker notes, that last goal will require tackling tough bureaucratic and labor reforms to improve Indonesia’s ease of doing business.
Bottom Line: Indonesia’s presidential elections wrapped up largely without incident; a second Jokowi terms promises continuity.
Don’t Miss It: Despite the renewed bout of Philippine-China tensions highlighted in the last issue of this newsletter, the Philippine presidential palace has described bilateral talks with China—Beijing’s preferred mode of engaging Southeast Asian countries—as the best way to address differences over the South China Sea.
Central Asia.
In April, South Korean President Moon Jae-in came to the United States for his first face-to-face meeting with U.S. President Donald J. Trump since the collapse of the Hanoi U.S.-North Korea summit. That trip, however, may not have been the highlight of Moon’s overseas travels given the modest outcome. Rather, on his way back from the United States, Moon took the scenic route back to South Korea, stopping over in Central Asia. It’s rare enough to see the leader of an OECD country like South Korea stop in any Central Asian country, yet Moon made multiple stops. His trip took him to Turkmenistan, Uzbekistan, and Kazakhstan.
The DIplomat’s Catherine Putz sums up the nature of the current relationship between South Korea and Central Asia:
While Central Asia is a distant partner for South Korea, it’s a growing market for South Korean technology and hungry to diversify its partnerships. In recent years, the region has turned its attention more deliberately to regional cooperation, generating an opening for states like South Korea to make inroads.
The agenda across all three states was broad. In Turkmenistan, President Gurbanguly Berdimuhamedov and Moon discussed energy and infrastructure cooperation, signing a range of agreements in the process. Moon’s visit there was the second by a South Korean leader, coming five years after the 2014 visit by his predecessor, Park Geun-hye.
In rapidly reforming Uzbekistan, Moon concluded a large package of deals—worth as much as $12 billion. In Kazakhstan, Moon commemorated the 10th anniversary of the “strategic partnership” between Nur-sultan and Seoul. He and his Kazakh counterpart discussed denuclearization given Kazakhstan’s post-Soviet experience with nuclear weapons and disarmament.
Moon’s tour across half of Central Asia was a reminder of South Korea’s unique outlook toward a part of Asia that receives little consideration from states that don’t directly border the region. In Uzbekistan, Moon delivered grand remarks to the country’s legislature, imagining a future of direct connectivity between the Korean Peninsula and the Central Asian region: “Doesn’t just the thought of it make your heart leap?” he asked.
Bottom Line: South Korean President Moon Jae-in’s tour of Central Asia showcased Seoul’s interest in the region.
Why Now? After a three-year pause, Turkmenistan is once again exporting gas to Russia. Catherine Putz examines the reasons why the resumption comes now.
Asia Defense.
We just passed the 40th anniversary of the Taiwan Relations Act at a time when cross-strait relations remain poor and U.S.-China tensions over Taiwan remain simmering. Amid all this, however, the French Navy conducted a transit of the Taiwan Strait earlier in April, drawing China’s wrath. As I discussed in The Diplomat, Beijing’s reaction was stark: It withdrew France’s invitation to the People’s Liberation Army Navy’s 70th anniversary commemoration events off Qingdao and, for the first time, an official Chinese Ministry of Defense spokesperson referred to the Taiwan Strait, an 80-nautical-mile waterway, as “Chinese waters.” Curiously, the press conference where that remark was made was later scrubbed on the MoD’s website, suggesting that China’s policy had not changed and that the spokesperson simply misspoke, borrowing from the South China Sea talking points perhaps inadvertently. (This wouldn’t be the first time a spokesperson misspoke in China.)
But it appears that the U.S. Navy may have attempted to clarify China’s view on the status of the Taiwan Straits. Just day after Beijing chastised France publicly and shortly after the PLAN’s 70th anniversary celebrations, two U.S. Navy destroyers transited the Taiwan Strait, again drawing Beijing’s ire. As the South China Morning Post observed, the official reaction from China after the U.S. transit was “low-key compared with previous foreign ministry reactions to vessels sailing through the strategic waterway.” Perhaps this was an attempt to make up for the presumptive overreaction to the French transit; try as it might, Beijing won’t be able to revise its position on the Taiwan Strait, most of which remains available for the free transit of commercial and military vessels under customary international law and the Law of the Sea.
Bottom Line: Two transits highlight Beijing’s shifting positions on the status of the Taiwan Strait.
Rotating Out: The U.S. Navy has announced that USS Wasp, the lead ship of the Wasp-class of amphibious assault ships, and USS Stethem, an Arleigh Burke-class guided missile destroyer, will be leaving the 7th fleet to return to the continental United States for maintenance. Stethem managed to conduct a Taiwan Strait transit before ending its deployment.
Extras.
I’m still not entirely sure if this was a poorly phrased joke or if the Indian Army was being completely serious, but its official social media account claimed to have discovered evidence of an actual “yeti.” Sadly, the evidence almost certainly is the result of a bear.
Don’t miss the just-released May 2019 issue of our magazine. This month, we look back at modern China’s foundational moment, the 1919 May Fourth Movement, and its many contested meanings. We also revisit the 1999 Kargil War and its implications for India-Pakistan relations today, explore how China’s Xinjiang crackdown is reverberating across the border in Kazakhstan, and analyze the future prospects of the U.S.-Philippine alliance. And, of course, we offer a range of reporting, analysis, and opinion from across the region.
Please do feel free to reach out with comments, tips, and feedback at ankit@thediplomat.com and follow me on Twitter at @nktpnd and The Diplomat at @Diplomat_APAC.