Xi Jinping’s Marco Polo Strategy


June 13, 2017

Xi Jinping’s Marco Polo Strategy

by Joseph S. Nye*@www.project-syndicate.org

*Joseph S. Nye, Jr., a former US assistant secretary of defense and chairman of the US National Intelligence Council, is University Professor at Harvard University. He is the author of Is the American Century Over?

Last month, Chinese President Xi Jinping presided over a heavily orchestrated “Belt and Road” forum in Beijing. The two-day event attracted 29 heads of state, including Russia’s Vladimir Putin, and 1,200 delegates from over 100 countries. Xi called China’s Belt and Road Initiative (BRI) the “project of the century.” The 65 countries involved comprise two-thirds of the world’s land mass and include some four and a half billion people.

Image result for xi jinping's Marco Polo Road

Originally announced in 2013, Xi’s plan to integrate Eurasia through a trillion dollars of investment in infrastructure stretching from China to Europe, with extensions to Southeast Asia and East Africa, has been termed China’s new Marshall Plan as well as its bid for a grand strategy. Some observers also saw the Forum as part of Xi’s effort to fill the vacuum left by Donald Trump’s abandonment of Barack Obama’s Trans-Pacific Partnership trade agreement.

China’s ambitious initiative would provide badly needed highways, rail lines, pipelines, ports, and power plants in poor countries. It would also encourage Chinese firms to increase their investments in European ports and railways. The “belt” would include a massive network of highways and rail links through Central Asia, and the “road” refers to a series of maritime routes and ports between Asia and Europe.

Marco Polo would be proud. And if China chooses to use its surplus financial reserves to create infrastructure that helps poor countries and enhances international trade, it will be providing what can be seen as a global public good.

Of course, China’s motives are not purely benevolent. Reallocation of China’s large foreign-exchange assets away from low-yield US Treasury bonds to higher-yield infrastructure investment makes sense, and creates alternative markets for Chinese goods. With Chinese steel and cement firms suffering from overcapacity, Chinese construction firms will profit from the new investment. And as Chinese manufacturing moves to less accessible provinces, improved infrastructure connections to international markets fits China’s development needs.

But is the BRI more public relations smoke than investment fire? According to the Financial Times, investment in Xi’s initiative declined last year, raising doubts about whether commercial enterprises are as committed as the government. Five trains full of cargo leave Chongqing for Germany every week, but only one full train returns.

Shipping goods overland from China to Europe is still twice as expensive as trade by sea. As the FT puts it, the BRI is “unfortunately less of a practical plan for investment than a broad political vision.” Moreover, there is a danger of debt and unpaid loans from projects that turn out to be economic “white elephants,” and security conflicts could bedevil projects that cross so many sovereign borders. India is not happy to see a greater Chinese presence in the Indian Ocean, and Russia, Turkey, and Iran have their own agendas in Central Asia.

Xi’s vision is impressive, but will it succeed as a grand strategy? China is betting on an old geopolitical proposition. A century ago, the British geopolitical theorist Halford Mackinder argued that whoever controlled the world island of Eurasia would control the world. American strategy, in contrast, has long favored the geopolitical insights of the nineteenth-century admiral Alfred Mahan, who emphasized sea power and the rimlands.

At World War II’s end, George F. Kennan adapted Mahan’s approach to develop his Cold War strategy of containment of the Soviet Union, arguing that if the US allied with the islands of Britain and Japan and the peninsula of Western Europe at the two ends of Eurasia, the US could create a balance of global power that would be favorable to American interests. The Pentagon and State Department are still organized along these lines, with scant attention paid to Central Asia.

Much has changed in the age of the Internet, but geography still matters, despite the alleged death of distance. In the nineteenth century, much of geopolitical rivalry revolved around the “Eastern Question” of who would control the area ruled by the crumbling Ottoman Empire. Infrastructure projects like the Berlin to Baghdad railway roused tensions among the Great Powers. Will those geopolitical struggles now be replaced by the “Eurasian Question”?

With the BRI, China is betting on Mackinder and Marco Polo. But the overland route through Central Asia will revive the nineteenth-century “Great Game” for influence that embroiled Britain and Russia, as well as former empires like Turkey and Iran. At the same time, the maritime “road” through the Indian Ocean accentuates China’s already fraught rivalry with India, with tensions building over Chinese ports and roads through Pakistan.

The US is betting more on Mahan and Kennan. Asia has its own balance of power, and neither India nor Japan nor Vietnam want Chinese domination. They see America as part of the solution. American policy is not containment of China – witness the massive flows of trade and students between the countries. But as China, enthralled by a vision of national greatness, engages in territorial disputes with its maritime neighbors, it tends to drive them into America’s arms.

Indeed, China’s real problem is “self-containment.” Even in the age of the Internet and social media, nationalism remains a most powerful force.

Overall, the United States should welcome China’s BRI. As Robert Zoellick, a former US Trade Representative and World Bank president, has argued, if a rising China contributes to the provision of global public goods, the US should encourage the Chinese to become a “responsible stakeholder.” Moreover, there can be opportunities for American companies to benefit from BRI investments.

The US and China have much to gain from cooperation on a variety of transnational issues like monetary stability, climate change, cyber rules of the road, and anti-terrorism. And while the BRI will provide China with geopolitical gains as well as costs, it is unlikely to be as much of a game changer in grand strategy, as some analysts believe. A more difficult question is whether the US can live up to its part.

6 thoughts on “Xi Jinping’s Marco Polo Strategy

  1. A coming “Chinese Century”?

    Every Chinese president has only 10 years to make his mark. It actually depends more on the next Chinese president than Xi himself.

    I see too much of Chinese nationalistic self-interest in this “Initiative”

    Beware of a Chinaman bearing gifts.

  2. Western critics and media have been spreading the perception that OBOR is simply about China throwing cash around the region. However, it’s actually supposed to be an inclusive project and Beijing wants international investors to get involved. It’s not just about countries sitting back and waiting for China to arrive with investment plans and loans. Western critics and media have also been spreading the galvanizing suspicions that OBOR is a Trojan horse for China extending its geopolitical clout, and dumping excess capacity abroad as its economy flags.

    Derwin Pereira gives OBOR the benefit of the doubt. He says critics wary of China’s belt and road should understand that all great powers seek to win political influence using the pull of economics. So far, Beijing has not detracted from this playbook. Please read:

    http://www.scmp.com/comment/insight-opinion/article/2093532/chinas-belt-and-road-plan-deserves-benefit-doubt

  3. I’m very proud of my team, the Golden State Warriors, which won the NBA Championship last night, has unanimously voted to decline the White House ceremony honoring their Finals win over the Cleveland Cavaliers. Warriors coach Steve Kerr has ripped Trump as a “blowhard” and “ill-suited” for the office, and player David West said Trump was a poor role model.

    “All the tactics that he used to get elected are the very things that someone like me, who works with youth on a consistent basis, are the things that we try to talk our young folks out of being,” West said. “We try to talk our young people out of being bullies. We try to talk our young men out of disrespecting women. We try to talk our young people into being accepting of other people’s opinions and other people’s walks of life.”

    “He is the complete opposite of all of that,” West added.

  4. After ZhengHe, came HaiJin. https://en.wikipedia.org/wiki/Haijin

    //https://www.britannica.com/biography/Zheng-He
    In 1400 the prince of Yan revolted against his nephew, the Jianwen emperor, taking the throne in 1402 as the Yongle emperor. Under the Yongle administration (1402–24), the war-devastated economy of China was soon restored. The Ming court then sought to display its naval power to bring the maritime states of South and Southeast Asia in line

    Xi-Core is merely repeating the same road traveled by Emperor Yongle, who gave us AngLiPo, or probably some say even HangTuah.

  5. From the various tidbits of infos that I’ve read, these are the conclusions that I have to the reasons for China’s One Belt One Road Initiative. Hopefully I make sense.

    At it’s heart, the OBOR is the next step in China’s continued rise in the quality of lives for its citizens. China is now the second biggest economy in the world, and perhaps in the next 10 years might even surpass the US as the biggest. But even when China has reach that level, it still wouldn’t be much to brag about. At that level, its per capita income would still trail that of much of the world. To truly ensure a quality life for its citizens, China would need to double, even triple its economy to that of the US.

    All this while, China’s gameplan has been its juggernaut manufacturing and infrastructure capacity. But it will soon reach a point of diminishing returns. And furthermore, the higher in the value chain that China’s products is competing, the more it is playing in the traditional home game of the developed nations of the world. The market for high end products is already at a saturation point. Furthermore, at that price point, China faces lots of ingrained biases in the opinion of developed countries consumers agaisnt its products. Not only that, even wealthy Chinese consumers themselves prefer to splash their cash on imported items, when their finances permit. Case in point, the prefered iPhones to domestic brands for the rich.

    What China has found out is that its coastal regions which has developed in record speed, has perhaps done so too quickly, quicker than China’s manufacturing progress to keep up with their tastes. Many people, especially Western commentators has been commenting that perhaps China should be changing to a consumer economy now. But this couldn’t be sound advice when two thirds of the country is still mired in borderline poverty. Remember, China is still a developing country, with 1.4 billion people to feed.

    This is where OBOR comes in. Two thirds of the country still needed uplifting. Unfortunately, by China’s sheer geographic size, there is no viable way to develop its hinterland, where it is so far away from the coast. Too far away from the major seaports to reap the benefits of the globalized economy. Further migration to the congested coastal region is a big no go as well. The only solution: to create a whole new economic market that is closer to its inland-most regions. This happens to be the Central Asian countries, who are also hampered by geographic handicaps to reap any benefits of the global economy now. What China has right now is its industrial and infrastructure expertise that can help push Central Asia to fulfil that development needs.

    Because those nations are also relatively early in its economic development, the kind of products that they need also coincides nicely into the kind of manufactures that China’s western-most provinces would be best placed to make. And by proximity, shipping costs would be immensely reduced. Which means that, early in the overland silkroad initiative, the objective will not be that focused in doing actual business with the developed nations of western Europe, that will still be mostly borned by sea trade, but to help push economic integration with Central Asia. So in a stroke, OBOR enables China to continue its growth but with a two pronged fronts.

    Now, selling stuffs among Central Asia and China’s far regions isn’t going to be the end game in itself. Ultimately, those regions would go up the value chain as well, and I’d think that eventually the aim is to bring the standards to close to developed world levels. In that time, railway or other land based links would improve to such levels as to be ecomlnomically viable for trade to bypass half of the sea routes to finally integrate all the way to western Europe as well.

    Geo-politically speaking, as the US is still having a superior navy that can be used to blockade any sea routes, and has been proven to be openly antagonistic to China, the land route would be much more insulated to that kind of inteference as well.

    Ok, this is just some of my thoughts as to the reasoning behind the OBOR. I haven’t really touch on much on the sea part of OBOR. I’m still trying to learn…

    • Shonen, in short, one of the reasons for OBOR is to facilitate Western China to catch up with Eastern China, economically.

      Sounds like a good idea. But, isn’t the Russian Steppe too vast and sparse to overcome?

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