China’s New Silk Road: An Interview with Mary Kay Magistad

Image: The World

Mary Kay Magistad is the creator of  “On China’s New Silk Road,” a podcast from the Global Reporting Centre. Reported on five continents, the nine-episode podcast explores how China’s rise and global ambition are seen around the world, and what impact its Belt & Road Initiative investments are having on the ground. Her earlier podcast Whose Century Is It?(2015-18), a co-production with The World, explored ideas,trends and power relationships shaping the 21st century. Some 60 episodes are archived here.  Mary Kay was an award-winning China correspondent for NPR (1995-99) and for PRX’s The World (2003-13). She has reported in most countries in Asia and several in Africa, on the impact of China’s global rise. She started as a foreign correspondent in Southeast Asia (1988-95), reporting for The Washington Post, The Boston Globe and others, before becoming NPR’s Southeast Asia correspondent. She has taught international reporting and audio journalism at the University of California at Berkeley. Mary Kay is a member of the Council on Foreign Relations, and has been a Nieman Fellow and Radcliffe Fellow at Harvard University.

Kathryn Putz conducted this interview. She is a Carter Center intern.

To start, could you explain what China’s Belt and Road Initiative is, which you refer to as the “New Silk Road?” 

Right. So the Belt and Road Initiative is many things depending on who’s speaking and in what context. Writ large, the Belt and Road initiative is kind of a vehicle for China to expand its influence in the world in different ways. So there’s a physical Belt and Road Initiative being built out with roads, railways, ports and pipelines. There’s a Digital Silk Road which includes using Chinese companies like Huawei to build 5G in as many places as possible, which would also enable China to have more resources and more knowledge to build out future telecommunications networks–6G and beyond. There’s a Science Silk Road — sharing resources and research with institutes in different countries. There’s a Space Silk Road which includes using some of the Digital Silk Road technology for space exploration, but also for security purposes in space and elsewhere. And of course, there’s the Health Silk Road which was kind of an afterthought. It was something that was thrown out as a possibility a few years ago, and then shelved. It was brought back during COVID-19, both as a way to increase China’s soft power, but also as a way to have China become more of a global player in biotech, in pharmaceuticals and other technologies and medicines.

The Belt and Road Initiative so far, on the physical side — the building out of physical infrastructure — has drawn interest from most of the world’s countries, which have signed on in some way. The Chinese government has laid out more than half a trillion dollars in loans. Most of the Belt and Road Initiative projects are done via China giving loans. Those usually finance Chinese companies coming in and building the infrastructure. In many cases, Chinese management teams stay on and run, say, the trains, as is the case in Ethiopia and in Kenya. In the ports, too, there’s quite often a Chinese management presence, as is even the case in Piraeus in Greece, which now is majority-owned by a Chinese state-owned company.

When I talked to different people as I was doing the research for my New Silk Road project, some would say, “Oh, well, the only thing that’s Belt and Road Initiative are the government-to-government agreements and projects.” But others would say, “Well, no, it’s actually a much bigger thing. It’s really about China’s global ambition.” And that’s part of the reason why I called my podcast On China’s New Silk Road, which was sort of echoing the ancient Silk Road. It’s something that the Chinese government has very intentionally done in selling this to the world as, “We’re going to build this network that’s going to be a win-win for everyone — a new community of shared future.”

But the old Silk Road, the ancient Silk Road, was a very thick network with many nodes. And so if one road got blocked by bandits or bad weather or whatever, there were many other roads that you could take. And every country, every place was connecting with many others. In other words, it was a network, not a hub-and-spokes. By contrast, with the Belt and Road Initiative, the Chinese government has made it very clear that it sees itself as being at the center of this new network of global trade and global power. It’s interested in having many partners. If those partners end up doing business with each other, okay. But that’s not the main point of this. The main point is for this to be done in support of China’s interests: to secure resources for China, to increase China’s influence in the world, and also potentially to play a security and military role going forward into the future by having a presence on strategic coastlines and in strategic ports.

Critics of the Belt and Road Initiative have accused China of pursuing “debt trap diplomacy,” luring developing countries into agreeing to unsustainable loans to pursue infrastructure projects so that when they experience financial difficulty, Beijing can take control of that infrastructure or commodity. Do you agree that China is using debt trap diplomacy in these projects?

As you no doubt know, this is a hotly debated question, and there are very strong feelings on both sides. And I come down somewhere in the middle. I don’t think that there’s an intention on the part of the Chinese government of, “Let’s go out and entrap as many countries as possible with opaque contracts that they won’t understand that will basically allow us to take control of their infrastructure.” However, I do think that the Chinese state-owned enterprises that have been involved in the Belt and Road Initiative with the Chinese government behind them have looked for opportunities that could help China’s interests in the long term. Chinese policy banks –- state-owned banks –- have looked out for the Chinese government’s interests in the world when they’re making their loans, and also for their own bottom line interest. So they drive a hard bargain.

And it depends then on how good a bargainer is the recipient country. Because the loans are given in a fairly opaque way, including that the agreements are often not made public. When I was in Malaysia and asked one researcher who focuses on China’s Belt & Road investments in Malaysia, about whether he’d seen the contract for a particular project, he said, “No, we can’t get ahold of it. We in our own country can’t get ahold of it.”

That level of secrecy leaves a lot of room for padding the contracts, having the amount of the loan be higher than what the project would actually cost if it were put out for a competitive bid. Sometimes, but not always, the interest rates from China’s state-owned policy banks are higher than those that the World Bank or the Asian Development Bank would offer for loans for the same kind of project. Sometimes, but not always, the payback period for Chinese loans is shorter,  and starts earlier, than the international banks might insist on.

Chinese loans also lack conditionality, which some recipient governments appreciate, but which isn’t always in the best interests of the recipient country. The World Bank and the Asian Development Bank and other multilateral banks go in and say, “Okay, how is this project going to pay for itself? How are you going to pay back the loan? Let’s make sure you have the structures in place within your economy and related to this project specifically, so it’s actually going to work in your interests, and also that we’re going to get our money back.”

All of those things are in play at once. So you’ve got Chinese loans that have opaque terms. You’ve got terms in some loans – higher interest rates, shorter payback periods — that are not as easy to deal with if you’re a country that’s already got a lot of debt. And then sometimes there’s this. Let’s just say that if a country, like say Sri Lanka, famously, couldn’t repay its debt on time, there was a provision in the loan contract that said then the Chinese state-owned partner could actually have a stake in that asset. So now a Chinese state-owned company has a 99-year lease to the Hambantota port and some 15,000 acres of land around it, with an option to renew the lease for another 99 years. The Sri Lankan government has tried to renegotiate these terms, and the Chinese side has thus far basically said, a deal’s a deal.

Some people who say this is not debt diplomacy, argue that what happened in Sri Lanka was a very specific case, and had more to do with the Sri Lankan government that made the deal, than with the Chinese government, or Chinese state-owned actors. Two thoughts on that. One is, however it came to pass, it has had an impact in how others in the world see the risks of Chinese investment. I was in Malaysia for the 2018 election when there was a lot of fear that was voiced by voters but also by Mahathir, who was eventually voted in as prime minister again, saying ‘we don’t want to be a colony again.’

The Indian government, too, took what happened in Sri Lanka as a concern. Indian leaders see China building its presence along the coasts of Myanmar to India’s east, Sri Lanka to India’s south, and Pakistan’s Gwadar port to India’s west, while also pushing to gain more territory on land to India’s north, and also building roads and dams in Pakistan-controlled Kashmir, which India claims as its own, and India sees China’s Belt & Road as a strategic threat to India, quite apart from the question of whether China is intentionally practicing ‘debt diplomacy’ – a term coined in India, upon seeing China giving loans with opaque terms to countries that are already in a lot of debt at risk of debt distress. 

There are eight countries according to the Center for Global Development in Washington, DC, that are in this position: Djibouti, Pakistan, Laos, Tajikistan, Kyrgyzstan, Montenegro, Mongolia and Maldives. It just so happens that each one of those countries is strategically interesting to China in terms of securing resources, commodities, and sea lanes that are important to China both for bringing in commodities, but also generally for projecting power with a blue-water navy that China has been working to build up for a couple of decades.

So that’s a very long answer to your question. But it’s complicated. I think the Chinese government is operating on multiple levels as it builds out the Belt and Road Initiative. It’s building infrastructure. It’s working in its own economic and strategic interests. When the recipient country’s government is thorough and rigorous in defending thatcountry’s interests, and in insisting on terms that are fair to that country, and manageable, in terms of paying back the loan, things go okay. Things go pretty well, sometimes. But there are a lot of different kinds of governments in the world. Some are competent. And some are both corrupt and authoritarian, and welcome the kind of investment that the Chinese government and the Belt and Road Initiative are offering – with no conditionality, and often inadequate review of whether the infrastructure being built will generate enough revenue to help the recipient country repay the loan on time  In several BRI recipient countries, Malaysia, Cambodia, and Kenya among them, people have asked why certain projects were even greenlighted, when other development needs were more pressing. There’s skepticism about how much this is truly the ‘win-win’ China promises, and whether it’s really much more about China pursuing its own long-term goal to build out a global hub-and-spokes infrastructure system that serves China’s economic and strategic interests.

As a follow-up question, out of all the countries you traveled to or covered, is there one or a couple of Belt and Road countries where the projects were successful and also welcomed by the local people? Is it Pakistan or is it Malaysia, as you mentioned?

I would say Ethiopia. I traveled around Ethiopia in early 2020. And this was my third time there – I’d also visited in 1987 and 2011, and I did my master’s thesis on Ethiopia during the 1984-85 famine.. So I have a sense of what the dearth of infrastructure was there before, and how much has changed in the last decade. And many Ethiopians, from farmers I talked to in remote villages to economists who were not connected with the government, to government officials, said, “Look, we need to be careful in terms of what kind of investment we accept from China to make sure that we can handle the debt. But China came in when a lot of other countries thought it was too risky to invest in Ethiopia, and they’ve helped transform the country.” One Ethiopian economist even told me, “China was a kind of savior for us.”  Ethiopia now has one of the fastest growing economies in Africa. Of course, it also now it has a new civil conflict in Tigray. And that’s a problem not just in terms of human misery, but also in terms of having the stability to continue to build up the economy.

Before the conflict started, Chinese investment had poured into Tigray. Tigrayan leaders had led the Ethiopian government from 1991 to 2018, and they’re the ones who ramped up Chinese investment throughout the country.  And so, there are now new Chinese-built roads. There’s the Chinese-built railway that goes from Addis Ababa up to Djibouti, a light-rail system in Addis Ababa, and had started building a rail link from Tigray’s capital Mekelle to Djibouti, construction of which had stalled by the time I visited Tigray in early 2020. Chinese construction teams are building many of the taller buildings in Addis Ababa’s financial district. In Tigray, there are Chinese-built dams, providing water to a region that was long drought-prone and famine-prone.  When I visited Tigrayan villages and kids saw me, a non-African, they called out “China! China!,” because the non-Africans they’d seen coming in, and building roads and dams, and putting up electricity poles, had been Chinese. Many Ethiopians I talked to seemed genuinely grateful for how Chinese investment and construction had improved their lives – much more positive sentiment, overall, than in other BRI countries I visited

By contrast, in Cambodia where I reported for many years when I was living in Southeast Asia, there’s a lot of resentment. And there’s particular resentment that a Chinese state-owned enterprise has a 99-year old lease to 20 percent of Cambodia’s northwestern coastline in Koh Kong province, where Chinese construction teams are building up what looks to be a city, with its own dam, and with an airport with the longest runway in Cambodia, big enough to accommodate military jets. And all this is happening in a remote, forested part of Cambodia that had no immediate need for any of this. The deal to make all this happen was shepherded through on the Chinese side by one of China’s most senior leaders at the time the deal was signed a decade ago —  Zhang Gaoli (Zhang was a member of the member of the Standing Committee of the Politburo of the Chinese Communist Party and a vice premier of the State Council). That suggests this deal was particularly important for China.  And you could see why, given that Cambodia’s coastline is near Vietnam, around the corner from the South China Sea, across from the strategically vital Malacca Strait and directly across a narrow isthmus in Thailand where China’s been angling to build and manage a canal as part of the BRI, strengthening China’s strategic positioning and maneuverability in the region.

There’s a bigger Chinese presence in Cambodia than just in Koh Kong. Just down the coastline from Koh Kong, there’s Cambodia’s only deep-water port, Sihanoukville, which some Cambodians complain now looks more like a Chinese city than a Cambodian one. When I visited in summer 2019, diplomats estimated that more Chinese were then living in Sihanoukville than Cambodians. And Chinese construction teams were building high-rises and roads, and had already built industrial parks.  This pattern of construction is consistent with a strategy Chinese think tanks have called port-park-city: build or expand a port, build a nearby industrial park, and buildings that can be used for residences or businesses – all for civilian use now, possibly for military use later, if ever needed. Chinese construction in Koh Kong fits this model too, as does that in Pakistan’s Gwadar port, and in Djibouti – all strategically located near potential chokepoints in maritime trade and traffic.

Now moving on to talk about the COVID pandemic, in your opinion, has China’s standing on the global stage improved or deteriorated during the COVID pandemic? If it has worsened, why do you think this image has gone negative even after China offered Coronavirus aid to some nations in Europe?

This is complicated too. Because anyone who’s been on lockdown over the last year, or who’s had to be careful, who’s had to change their life because of COVID, knows, or at least most of us  know, that if the Chinese government had been swifter to act to contain the virus early on, instead of trying to silence doctors and researchers who were signaling that this was serious, we might not have had a pandemic – or, at least not one of the scale we have.

That said, after that initial stumble, China’s approach to containing the virus at home proved effective, even if international media called it draconian at the time. China has had far fewer COVID cases than the United States, or than many European countries, even though it has a much larger population.

China’s state-run media has taken that as an opportunity to boast that its system of governance is superior, which generally hasn’t played well outside of China.  China did send PPE around the world, in what some have called “mask diplomacy.” And some countries have received it gratefully.  But some Europeans I talked to when doing reporting for my “On China’s New Silk Road” podcast thought China was trying to milk this too much for its own self-aggrandizement, especially given that the European Union had sent PPE to China early in China’s struggle with COVID-19.

There were other Chinese missteps too from a public relations perspective. Chinese state-run media were trying to deflect any blame for the pandemic from China, suggesting it may have all started in Italy, because some of the early COVID-19 cases showed up in Italy. But there’s a lot of traffic going back and forth between China and Italy, and specifically from Wuhan to Italy.

So this misdirection annoyed Italians. So did a Chinese state-run media report that suggested that Italians under lock-down were out on their balconies singing the Chinese national anthem and shouting thanks to China, for sending PPE. Italians were actually singing their own national anthem, and thanking medical workers. So some complained, ‘why do you have to be so heavy-handed with the propaganda? Why can’t you just do a nice thing, send PPE, and leave it at that?”

So I think in some cases it’s the Chinese government or different arms of officialdom in China just going too far, and trying to use the moment for China’s soft power in terms of doing propaganda the way that might sometimes work in China, but doesn’t work so well outside of China.

In 2014, China and the US worked side by side in West Africa to contain the Ebola epidemic. And that cooperation eventually led to the joint US-China effort to create the African Center for Disease Control. Do you think Washington and Beijing could similarly sit down and discuss ways to coordinate their development assistance to African countries today?

That’s a really interesting question. And it gets to another interesting question which is, why do countries give aid? I mean, how much of it is, “We just want to help? We just want to help you do better. We just want to help countries that could be vital parts of a global economy get there more quickly.” Certainly that’s one part of it. But another part of it is, “We want to have influence on the ground in this region.” So a big question for the Biden Administration, in deciding whether and how to cooperate with China in Africa is, where do our different interests overlap in a way that allows us to work together? Perhaps that could work on specific projects, like getting enough COVID-19 vaccine to Africa.

But in terms of a longer-term, more multi-dimensional approach to giving aid to Africa, I think there’s always going to be this tension of, does the United States have different priorities and different approaches that don’t really mesh with the way China wants to do things? And I don’t know the answer to that. I could see a future where there’s some overlap and there’s some areas where China and the US and other powers could collaborate, recognizing that it’s in everyone’s interest for African countries to be able to do better more quickly. But I could also see a future where the governments of China and the United States say, “We’ve got our competing ways of doing this, and we have competing interests, and by and large, we want to go forward on parallel tracks.”

According to a 2018 Asia Society report, Chinese Communist Party initiatives in the United Front Work Department to advance policy objectives in the US have increased significantly in recent years. These initiatives, such as the Chinese Students and Scholars Associations (CSSAs), and Confucius Institutes, promote the acceptance of CCP rule. Do you think that China is undermining American democracy through these so-called United Front measures?

I think the Chinese government is much more interested in projecting and promoting what they see as the clear superiority of the Chinese Communist Party and China’s system of governance,  than they are interested in undermining American democracy. In some ways I think, the Chinese leadership feels like, “You guys are shooting yourselves in your own feet, or you have been over the last few years. So you go ahead. Because we look good by comparison. We have a vision, we have competent technocrats in our government, we can have a long-term vision. And  we can make sure those plans get carried out, because we have a stable government over time.”

Of course, many Americans are aware that China’s government is not only stable but authoritarian, and has been increasing surveillance of citizens, clamping down on speech critical of the government, with especially harsh action again the Uighurs – the ethnic Turkic Muslim population in China’s western region of Xinjiang. It’s estimated that more than a million Uighurs and ethnic Kazakhs in Xinjiang have been detained and ‘reeducated,’ because some want autonomy for their region. Even those who haven’t been detained are under draconian surveillance and intimidation. To many Americans, and others, this is in no way a sign that the Chinese Communist Party’s approach to governance is superior to democracy.  And China’s leaders and hackers have not been as focused as spreading disinformation in the United States in a way that could more directly undermine democracy as, say, Russia’s have.

But China’s leaders are very much interested in controlling how China is seen in the world. Confucius Institutes in US universities have been active in trying to block speakers critical of the Chinese government from coming on campus. Chinese students in the United States are encouraged to join Chinese student groups, many of which have Communist Party members keeping an eye on Chinese students abroad, to make sure they stay in line, only say good things about China, and don’t get any ideas about how the Chinese system of governance should change.

So I think it’s less about undermining American democracy and more about limiting speech that is critical of China, no matter where in the world that speech may occur.  The Chinese government now has what they’ve called Wolf Warrior diplomacy, named after a series of Chinese action films. It’s basically an approach of, “We’re going to fight back, we’re going to hit back if people criticize us.” That doesn’t, I would argue, serve them very well for the same reason that the heavy-handed propaganda during COVID-19 hasn’t served them well around the world. And meanwhile, actions like trying to curtail free speech, trying to block speakers like the His Holiness Dalai Lama at American universities, hasn’t done China’s global image any favors.

One approach the US could take towards China goes as follows: We do not like many things the Chinese government does and we will continue to criticize them, but it is not our business to decide how they govern, improve living conditions for their people and choose their leaders. What are your thoughts on this particular approach?

I expect that the Biden Administration will be more active than that. But I think one of the things that everyone in the Biden administration needs to keep in mind when dealing with China is that China’s not in the same place that it was a decade ago, during the Obama Administration.  China now sees itself as a peer of the United States. And if you look at like the Pew Research survey of global attitudes toward major powers, many people in many countries in the world see China as the more powerful economy and, in some cases, as the greater global power.

So there’s a question of how much the US government can effect change of China’s actions, especially within its own borders. Think of it this way. If the Chinese government were to say to Americans, “Okay, United States, you’ve been ripping children from the arms of mothers at the Mexican border. So because you’ve done that we’re now going to impose trade sanctions on you,” Americans would respond, “How dare you? Why do you think you can do that to us? This has nothing to do with you.” 

And that’s how the Chinese government sees the US or Europe or whomever saying, “We’re going to impose economic sanctions on you because of something you’re doing within your borders.” I’m not saying that means it shouldn’t happen. I’m just saying, they see it as an affront. They see it as trying to put China in a subordinate place, where it doesn’t belong.

Something the United States can do effectively, though, is push back against China’s effort to promote and export its model of governance as being superior to American democracy.

What the United States can do to promote democracy and US values in the world is live those values. I can say having lived in China for 15 years that I heard Chinese friends, acquaintances, people I was interviewing respond much more positively when, say, Barack Obama was elected president, than when the US government condemned the Chinese government for human rights abuses within China. Nationalism is strong in China, as in the United States, and many Chinese have learned from childhood to think of such US interventions as unwarranted interference in China’s internal affairs.

The US government will continue to speak out about the situation in Xinjiang, and in Hong Kong, and personally, I think it should.  It should also be realistic about how much any US government is going to be able to reshape how the Chinese government works at any level.  That kind of change will most likely come, only when Chinese people push for it. And as long as most or many Chinese people feel the government’s doing a decent job of improving quality of life at home and making China more powerful in the world, don’t expect a revolution anytime soon.

Many scholars have said that the US China relations are at their lowest point in decades, and US engagement policy towards China has been declared dead by top American officials. Do you think real meaningful cooperation between the US and China is possible given these circumstances?

On climate change, the US and China can work very closely together. The Biden Administration has said its own work on climate change is a top priority, with an all-of-government approach. And the Chinese government says that it wants to be more proactive on climate change, a significant change from a decade or more ago. And so yeah, I think that that would be one easy win, in terms of cooperating toward a goal that will affect the lives of everyone on the planet.

Overall, the Biden Administration will be forging its own path, in determining how and when to cooperate or collaborate with China, and when to compete or even challenge it, in the service of US interests at home and around the world. China will be making its own calculations, but has a record of being pragmatic, in being willing to cooperate when it furthers China’s interests.

Since you wrote your thesis on Ethiopia, I want to briefly return to the topic of Ethiopia. You mentioned the civil conflict in Tigray and Prime Minister Abiy Ahmed. And you also mentioned that China has interest in Ethiopia as a market and also strategically on the Horn of Africa. So, do you think China can play a role in mediating to get the central government out of the civil war?

Prime Minister Abiy has been trying to move away from dependency on China. In late 2019, the World Bank and the IMF each gave $3 billion in loans to Ethiopia. The Chinese government seemed not entirely thrilled about that, after decades of having a close relationship with a Tigrayan-led Ethiopian central government.

The conflict now between Abiy’s government and the Tigrayan People’s National Liberation Front (TPLF), playing out as a military conflict in Tigray, started because Abiy felt Tigrayan leaders were defying and challenging his leadership, and acting like they may even consider breaking Tigray away from Ethiopia. So Abiy apparently felt he had to fight back, and keep fighting until Tigrayan defiance to his rule was subdued. Tigrayans are suffering as a result, with Amnesty International having just issued a report accusing Abiy’s forces and supporters of ethnic cleansing in Tigray.

China’s government has offered to send food and other aid into Tigray, and has called on the two sides to cease fighting and talk.  Abiy may be skeptical of such overtures, knowing that China is trying to secure its presence in the Horn of Africa, and that China has for decades been close to TPLF leadership – who had governed Ethiopia for decades. Chinese food aid circulating in Tigray could be a public relations boon for China, and could also help Tigrayans keep fighting, neither of which would necessarily be in Abiy’s interests. Of course, Abiy’s government still owes China billions of dollars in loan repayments, so China has some leverage, even if Abiy prefers to move in a more Western-oriented, free market direction, going forward.

Click here to watch the video of this interview.

Author

  • Kathryn Putz

    Kathryn Putz is a junior at Dartmouth College majoring in Government and Asian Societies, Cultures and Languages. At Dartmouth, she serves as the co-president of the Dartmouth Women in Law and Politics club and works as an Admissions Ambassador. She studied advanced Chinese in Beijing, China. Previous to interning for The Carter Center, Kathryn worked in the Portland office of Congressman Earl Blumenauer, and supported the podcast production team for World Affairs Council, a San Francisco-based nonprofit organization.