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Chinese and US Engagement with Developing Countries News Roundup: Mar.11 – Mar.29, 2019

Every two weeks, The Carter Center’s China Program releases an overview of major events involving Chinese and US global engagement, with a particular focus on emerging issues in Africa and Latin America. In addition to using news sources, the news roundup will analyze papers and reports from academic journals, governmental bodies, and NGOs, and will also summarize debates and other events organized by think tanks on select issues. The news roundup is intended to be a platform and resource for both China watchers and for readers interested in political and economic development in developing countries. It aims to deepen the understanding of China’s foreign policy, and emerging issues and trends in developing countries, as well as to enhance the prospect of multinational cooperation among China, the U.S., Africa and Latin America.

Is China’s Belt & Road Project a Trillion-Dollar Blunder? Debate #2 

(Intelligence Squared Debates, 03/01/2019) 

(The debate. Photo: Youtube)
(The debate. Photo: Youtube)

Ian Bremmer, Michèle Flournoy,Yasheng Huang, Parag Khanna, and Susan Thornton debate the potential of China’s Belt and Road Initiative in this video and whether the project is a mistake. 

Below is a list of the debaters and summaries of their main points: 

Ian Bremmer, Founder and President, Eurasia Group 

  • Bremmer argues that the Belt and Road Initiative is not a blunder because of the huge opportunities for gaining political leverage that it gives China. He says that by spending so much time working with Chinese leaders on the infrastructure projects, foreign leaders gain more exposure to China’s political system and ideals and become much more likely to want to align their own ideals with Beijing’s. He raises the Slovak Prime Minister as an example. He also refers to BRI as a “Chinese Marshall Plan without the democratic conditionality”.

Michèle Flournoy, Co-Founder & Managing Partner, WestExec & Fmr. U.S. Undersecretary of Defense for Policy 

  • Flournoy does not believe it is a mistake. She lays out the benefits of the BRI, such as China’s potential for political influence, access to new export markets, promotion of Chinese currency, tariff reduction, and access to new trade routes. She highlights its success so far in countries like Greece, Sri Lanka, and Pakistan. However, she also discusses the reasons some smaller debt-ridden countries, like Malaysia or the Maldives, are more wary about participating. Ultimately, she concludes that the best space for the U.S. to attempt to compete in is the digital realm. She believes that our first goal should be finding a viable alternative for telecommunications networks to Huawei to promote cybersecurity. 

Yasheng Huang, Professor, MIT & Author, “Capitalism with Chinese Characteristics” 

  • Huang does believe the BRI is a big mistake. He bases his position on looking at the initiative from a financial perspective rather than a political perspective. His main argument is that infrastructure development doesn’t jumpstart economic development but is rather a result of economic development. 

Parag Khanna, Founder & Managing Partner, FutureMap 

  • Khanna does not believe the Belt and Road Initiative is a mistake because he believes the BRI has actually been around for a long time, just without a name. He places the importance of the BRI on the connectivity of Afro-Eurasia, which he says is inevitable and mutually beneficial. He concludes by saying, “Beijing builds lots of roads, but all roads won’t lead to Beijing”, emphasizing that the BRI is connecting many countries to one another, not just to Beijing. 

Susan Thornton, Senior Fellow, Yale University Paul Tsai China Center & Fmr. Assistant Secretary of State for East Asian and Pacific Affairs

  • Thornton does believe the BRI is a blunder because she does not believe these projects have enough profit potential. She points to the example of the U.S.’ “New Silk Road” and how it failed due to the unfeasibility of the projects. She calls these projects “bridges to nowhere”, as she thinks the projects and investments are inefficient. Ultimately, she believes China is just wasting huge sums of money.  

Pakistani Ambassador to U.S. Dr. Asad Majeed Khan on Pakistan’s Priorities 

Pakistani Ambassador to the U.S., Dr. Asad Majeed Khan spoke at the United States Institute for Peace on March 4. He discussed the complications in the Pakistan-India relationship at the moment. He repeatedly emphasized that Pakistan was trying to reach out to India for communication but that the outreach was left unreciprocated. He made a point that now was the time to finally resolve the Kashmir dispute and that it was a top priority of the new Pakistani Prime Minister. When asked about Pakistan’s relationship with China and what it means for the U.S., Khan replied that the world today is very different than the Cold War Era, in which alliances were “hard”. Now, he said, we live in a world of soft alliances, in which Pakistan can have a relationship with China that doesn’t exclude anyone. He also pointed to the economic connectivity of China and the U.S. and China and India as indicators of global interconnectivity and “soft” lines. Overall, he said, Pakistan is currently interested in building a safer and more peaceful geographic neighborhood in order for Pakistan and other countries to continue growing economically. Therefore, Pakistan is interested in promoting peace in Afghanistan and between India and Pakistan. 

For Africa, Chinese-Built Internet Is Better Than No Internet at All  

(Mackinnon, 03/19/2019)

(A Huawei staff member uses her phone at the Huawei Digital Transformation Showcase in Shenzhen. Wang Zhao/AFP/Getty Images)
(A Huawei staff member uses her phone at the Huawei Digital Transformation Showcase in Shenzhen. Wang Zhao/AFP/Getty Images)

Despite the U.S.’ frequently voiced cybersecurity concerns about Chinese telecommunications company Huawei, it has continued to find a massive market on the African continent. One of Huawei’s competitive advantages in African countries is that the loans from Chinese state banks that come with the construction of 4G networks is quicker and easier to attain than loans from international institutions. Since Africa is a hotspot of emerging economies and growing population, the need for quick and easy internet access and loans outweighs the cybersecurity risk that many countries believe Huawei presents. As the U.S. is concerned about China using Huawei for espionage purposes, it has threatened to withhold intelligence from countries where Huawei is present. While many countries hold the belief that China is spying on Africa, African officials have made it clear that they simply don’t care at the moment. Currently, Africa’s need for low-cost internet connectivity holds prominence over intelligence concerns. The U.S. can’t compete in that field right now, so it will rather have to continue to encourage African leaders not to cooperate with Huawei.

China Inc.’s Boeing Rival Just Won’t Fly 

With questions swirling around the safety of Boeing’s 737 Max 8, the Chinese aviation industry is seeking to build in-roads with potential customers. The Chinese aircraft maker, COMAC, would love to cut into competitors Airbus, and Boeing’s market shares, but it lacks aircraft and certification to achieve such things. Expanding into European and North American markets remains a difficult path for Comac, as certification take more than 5 years, with this certification process receiving more questions following the failure of the 737 Max 8. Thus, in looking to Africa, Comac has been able to gain a “toehold” of sorts in growing its customer base, signing two aircraft to a Ghana-based carrier and achieving certification in the Republic of the Congo. China’s attempt to expand its aviation foothold abroad, and particularly in Africa, ties into the BRI strategy of building airports and transportation infrastructure in the developing world.

Kenya Set to Build $2 Billion Mega City with China’s Money 

(Europa-Taylor, 3/23/2019)

(Chinese companies have been the lead contractors in most satellite cities in Kenya. Credit: The New Times)
(Chinese companies have been the lead contractors in most satellite cities in Kenya. Credit: The New Times)

Plans to develop a $2 billion settlement outside of Nairobi are underway in Kenya. The city, to be named “Friendship City” will be built under the leadership of the Chinese Firm, Beijing Damei Investment Company. The city is slated to be 1200 acres, and the Chinese firm intends to partner with a Kenyan Firm, Zuri Group Global, to achieve this lofty goal. It is suggested that the project could introduce 150,000 jobs to the region, as well as an additional 500,000 jobs indirectly. In order to facilitate economic growth, Friendship City will qualify as a Special Economic Zone, or SEZ. With Kenya’s middle class growing, this project is expecting to accommodate the growth with adequate accommodations. This positive appeal comes as China continues to win over the hearts of its African counterparts through a plethora of investments including the construction of the new African Union Headquarters in Addis Ababa.

Italy, China Sign Accord Deepening Economic Ties 

(Chinese President Xi Jinping, left, and Italian Premier Giuseppe Conte shake their hands at the end of the signing ceremony of a memorandum of understanding at Rome's Villa Madama, Saturday, March 23, 2019. Italy signed a memorandum of understanding with China on Saturday in support of Beijing's "Belt and Road" initiative, which aims to weave a network of ports, bridges and power plants linking China with Africa, Europe and beyond. AP Photo/Andrew Medichini)
(Chinese President Xi Jinping, left, and Italian Premier Giuseppe Conte shake their hands at the end of the signing ceremony of a memorandum of understanding at Rome’s Villa Madama, Saturday, March 23, 2019. Italy signed a memorandum of understanding with China on Saturday in support of Beijing’s “Belt and Road” initiative, which aims to weave a network of ports, bridges and power plants linking China with Africa, Europe and beyond. AP Photo/Andrew Medichini)

The Italian government has signed a memorandum of understanding with the Chinese government to support the expansion of the Chinese Belt and Road Initiative. With this, Italy becomes the first of the seven major economies to sign on to the BRI, following Portugal. According to the Italian Minister of Economic Development, this deal is expected to be worth $2.8 billion, with the potential to increase to $22.6 billion in the future. This comes at a time when the Italian economy is struggling and could use a boost to help it grow. Italy may even have the chance to reclaim its role as a key link in trade between the east and the west. While this gives China the crucial inroad it has been seeking into Western Europe, many Europeans remain skeptical, maintaining the concern that unfair competition will arise again State-backed Chinese firms and private European companies. 

IDB Scraps Annual Meeting After China Excludes Venezuela 

The Inter-American Development Bank’s planned annual meeting for next week in Chengdu, China has been cancelled. The meeting will have to be relocated due to Beijing’s refusal to let Venezuela’s representative, Ricardo Hausmann, attend, based on the fact that they were chosen by opposition leader Juan Guaidó. Garrett Marquis, the U.S. National Security Council spokesman spoke out against this move via Twitter, saying that this shows China’s lack of reliability as a partner in Latin America. The U.S. is among many countries that support Guaidó, whereas China remains in support of Nicolás Maduro.

Africa: A Continent Where Partnership is in Demand 

(Col. Karns, 3/24/2019)

(U.S. Marine Lt. Col. Joseph Lee, U.S. defense attaché to Ghana and Benin, and Ambassador Alexander Laskaris, deputy to the commander U.S. Africa Command civil-military engagement, are greeted by the Benin Armed Forces’ top leadership during an engagement, March 19-20, in Cotonou, Benin. Laskaris led a 3-country engagement mission to Benin, Nigeria, and Cote d’Ivoire. Col. Chris Karns/U.S. Africa Command)

The United States Africa Command seeks to define its actions and its values, not through what has become known for as of late, airstrikes in Somalia, but rather training and educational opportunities at has introduced for its African partners. Ambassador Alexander Laskaris, deputy to the commander for civil-military engagement at AFRICOM has aimed to make such goals clear through meetings with various regional leaders. Colonel Karns writes, “If African countries are to become exporters of security beyond their borders, and not importers, U.S. government educational programs and partnership-building capacity are key.” In this opinion piece, it is mentioned that the U.S. has worked to invest in the future military leaders of its African counterparts through programs like the Defense Language Institute, which are now being implemented by nations like Cote d’Ivoire. While AFRICOM works to further its image, the Chinese have taken on a highly visible and influential role in the continent as well. Beyond the Chinese base in Djibouti, the Chinese Government has made diplomatic visits to 43 African nations and counting. While the influence of China poses a challenge, Africa remains a land for opportunity where the U.S. has the chance to fill the void.