Transcript:
The Inside Story: Belt & Road and Beyond
Episode 83 – March 16, 2023
Show Open:
Unidentified Narrator:
China’s influence is growing around the world.
Ammar Malik, Chinese Development Finance Expert:
The idea of the Belt and Road Initiative was to develop connectivities between China and the Global South.
Unidentified Narrator:
From energy generation in Ecuador to generational education in South Africa ---
The impact of China’s investments ---
Now, on The Inside Story-Belt and Road and Beyond.
The Inside Story:
ELIZABETH LEE, VOA China Abroad Editor:
Hi. I’m Elizabeth Lee, VOA’S China Abroad editor. For the past 6 months, I’ve been working with reporters and editors here to explain China’s growing influence around the world.
Today, we take you inside Beijing’s Belt & Road Initiative.
China has been funding development projects across the globe for more than two decades.
An uptick in spending happened in 2013 when leader Xi Jinping proposed the creation of a land and sea initiative called, at the time, the Silk Road Economic Belt and the 21st Century Maritime Silk Road.
This concept has evolved over the last 10 years into what is now known as the Belt and Road Initiative --- or BRI. And observers say China's strategy to globalize may be entering a new phase.
Through its Belt and Road Initiative China has made its mark worldwide, funding projects as far-flung as power plants in Ecuador and high-speed rail in Laos.
Ammar Malik, Chinese Development Finance Expert:
The idea of the Belt and Road Initiative was to develop connectivities between China and the Global South. The bulk of Belt and Road financing has gone into hard infrastructure sectors such as transportation, energy, mining.
But China has now also folded a lot of their cultural initiatives — their educational initiatives scholarships, Confucius Institutes and others — into this big juggernaut of the Belt and Road Initiative.
ELIZABETH LEE:
The country has emerged as the lender of first resort for many developing countries.
Min Ye, Expert in Chinese Political Economy:
It's more China's globalization strategy.
ELIZABETH LEE:
As with many infrastructure projects, there will be winners and losers.
Ammar Malik, Chinese Development Finance Expert:
If you are living right next to a highway and you don't own a car. Or you are a low-income worker and cannot afford to take that expensive high-speed rail, you may have a very different view of the project that was implemented in your neighborhood.
ELIZABETH LEE:
China observers say that after a decade of implementing Belt and Road projects and fighting the pandemic, Beijing may be recalibrating.
Ammar Malik, Chinese Development Finance Expert:
It is obvious to us that the era of cheap money with low interest rates and large-scale megaprojects is likely over. A lot of these loans that they had given out during the first
five years of the Belt and Road area are now only coming due for repayments. And they are realizing a lot of the projects are not as commercially viable as they thought that they might be.
ELIZABETH LEE:
The impact of China’s global footprint can be seen through geopolitical tensions with the U.S.
Hong Zhang, China Public Policy Expert:
The motivation for China to initiate the Belt and Road Initiative was to kind of have to hedge against the potential conflict with the U.S. probably. And so, by doing this or these things, by showing the kind of activism on these fronts through the BRI, that convinced the U.S. and the other powers that China is ambitious. China has these intentions to kind of rewrite or reshape the global order.
ELIZABETH LEE:
The scope of Beijing’s global influence has changed how the U.S. and its allies see China. Some officials warn China is a threat and is no longer the world’s factory of cheap exports.
Karen Donfried, Assistant Secretary of State for European and Eurasian Affairs:
Europe suddenly realized that China was coming to Europe and buying up strategic critical infrastructure. It changed their perspective on China.
Min Ye, Chinese Political Economy Expert:
How much China would commit to BRI is decided by how much it helps or works for China.
Ammar Malik, Chinese Development Finance Expert:
They are much more likely to engage in cultural exchanges and to win over public opinion toward China.
ELIZABETH LEE:
Especially in the global south as Beijing paves the path toward an era in which China is one of the largest powers in the world.
ELIZABETH LEE:
Like many nations, Ecuador endured energy shortages for decades. In 2006, the South American country financed a loan with the export/import bank of China to build the Coca Codo hydroelectric power plant.
From the capital Quito, reporter Nestor Aguilera gets us up to date on the external and internal challenges the project faces.
NESTOR AGUILERA, Reporting for VOA:
Édgar Zúñiga’s 80-year-old ice cream shop in Quito has seen a lot of history, including when electricity had to be rationed in the 1990s.
Édgar Zúñiga, Owner of Heladería Victoria:
Our freezers need to have the right temperature to be able to serve ice cream. So, when we were told, we were going to have two, three, four hours without electricity, for us it was a shock.
The solution to Ecuador’s power problem was the Coca Codo Sinclair hydroelectric power plant built with help from China’s Sinohydro state-owned construction company. When operating at capacity, it can supply a third of the country’s electricity. The project cost more than $2 billion and was financed with a $1.7 billion loan from the Export Import Bank of China. Since the plant’s inauguration in 2016 the project has been surrounded by controversy.
Fernando Villavicencio, Assemblyman:
China lent us the money and forced us to hire a company they wanted. The state could not decide which was the best company and the best cost.
NESTOR AGUILERA:
The most current concern -- the appearance of thousands of cracks in the plant’s distributors which conduct the water to the turbines to generate electricity.
Roberto Varhola, Mechanical Engineer:
The worst nightmare a mechanical engineer has is for there to be a crack in a part.
NESTOR AGUILERA:
In response to media coverage of the problems with the plant, the Chinese state-run news outlet Global Times quoted Chinese Embassy officials in Ecuador saying “the problem has been assessed by an international third-party independent testing agency which concluded that it will not affect the operation and safety of the unit and that the plant is safe for its 50-year design life.”
In addition to structural problems within the plant, the Coca Codo Sinclair project is also facing environmental threats. In 2020, erosion near the plant damaged oil pipelines in the region and destroyed a part of a highway. Geologist Carolina Bernal links the aggressive nature of the erosion to the way sediments are managed by the power plant.
Carolina Bernal, Geologist:
It’s an area that is having more and more problems, because there is a threat that due to the constant accumulation of sediments, the mechanical room will flood and we would have to be dredging all the time, removing that sediment.
NESTOR AGUILERA:
Local residents are disappointed by the lack of economic benefits brought by the plant.
Luis Herrera, Local Resident:
The hydroelectric project was going to generate tourism, attract more people to see the hydroelectric installations, but it didn't happen at all.
NESTOR AGUILERA:
Instead of money flowing into the area, repairs of the plant will cost money, as will dealing with the erosion, in order to keep the lights and freezers on in the country.
For Néstor Aguilera, in Quito, Ecuador, Miguel Amaya, VOA News.
ELIZABETH LEE:
China’s Belt and Road Initiative is not limited to infrastructure projects. Building bridges, culturally, is an important part of the strategy.
From Cape Town, our Kate Bartlett shows us how China’s educational programs are making inroads in South Africa.
KATE BARTLETT, Reporting for VOA:
Tai chi, tea and pandas: it’s Chinese soft power on display at a new Confucius Institute in South Africa. It’s one of some 60 on the continent.
Wilma Hugo, Confucius Institute Chinese Language Facilitator:
We have a growing relationship with China, with business and all kinds of things. They need translators and we are actually starting to teach Mandarin in South Africa.
KATE BARTLETT:
In Africa these institutes are welcome and growing.
The first Confucius Institute opened its doors in South Korea in 2004. With the support of China’s ministry of education, China says the Institutes aim to promote Chinese language and culture.
But the U.S. and Britain say the centers spread propaganda. In 2020, the U.S. designated the Washington-based Confucius Institute U.S. Center as a foreign mission. More than 100 of the centers have closed on U.S. campuses.
European countries, including Sweden, Finland, Norway, Belgium and Denmark have been closing Confucius Institutes at universities in recent years.
In the decade leading up to 2022, China says it has built Confucius Institutes in 159 countries and territories with some 500 Confucius Institutes around the globe. The Institutes mainly operate within local universities and with sister universities in China.
Liren Zeng, Confucius Institute at University of the Western Cape:
If you don’t want to do anything with the Chinese government then you can’t collaborate with the universities in China.
KATE BARTLETT:
University of the Western Cape’s director of International Relations, Umesh Bawa says he’s been warned.
Umesh Bawa, University of the Western Cape:
With our Nordic partners in Europe, because we have some of them also who have closed down their Confucius Institute and have cautioned us, be careful about this as being a Trojan horse.
KATE BARTLETT:
Some academics warn — the institutes interfere with free speech where some faculty may even self-censor on topics critical of China.
Cobus Van Staden, The China Global South Project:
If a university for example invites a Tibetan representative, then they might get push back from the Chinese embassy, but now they might also get pushback from the Confucius Institute.
KATE BARTLETT:
Zeng says the concerns are unfounded.
Liren Zeng, Confucius Institute at University of the Western Cape:
When we have a Confucius Institute, we would have a local co-director, and the local co-director would have control of all the curriculum and the activities, the events, so we abide by all the laws and the rules and regulations of the local university, and our curriculum is heavily scrutinized by the local faculty.
Unidentified speaker:
On behalf of the Consulate General of the People’s Republic of China in Cape Town, I would like to extend my heartfelt congratulations on the official opening of the Confucius Institute.
KATE BARTLETT:
In November 2022, this Confucius Institute opened in Cape Town, South Africa. This is the sixth institute in the country. Western concerns about the Chinese institutes don’t necessarily apply to the University of the Western Cape says Bawa.
Umesh Bawa, University of the Western Cape:
We’re very clear about what partnerships we make, and like everything else we’re cautious. We don’t do partnerships with people who do not share our values.
KATE BARTLETT:
Many people in the democratic nation have been receptive to China’s educational Institutes due to its history with Beijing.
China supported many Black liberation movements against colonialism and white-minority rule which led to discrimination and racial segregation during much of the 20th century.
Education programs such as Confucius Institutes, scholarships, exchange programs and vocational training help develop talent and promote cultural exchange which are key components of the Belt and Road Initiative.
In Africa, educational programs are not only limited to everyday students. Last year, politicians from six African countries attended a new $40million “leadership academy” in Tanzania opened by Beijing. The aim is to train African politicians. While some analysts fear these types of educational programs will promote Chinese communist ideology, others say not every nation shares this concern.
Cobus Van Staden, The China Global South Project:
Among African students, isn’t such a politically fraught issue in the global South as in the global North.
KATE BARTLETT:
While some countries warn China’s educational initiatives are a threat to democratic values, other nations see educational partnerships with Beijing as an opportunity to benefit from China’s Belt and Road projects.
Kate Bartlett for VOA News, Cape Town, South Africa.
ELIZABETH LEE:
From 5G infrastructure to mobile phones, Chinese technology is used in many of the devices and applications used around the world.
The Technology component of China’s BRI is called the Digital Silk Road.
It is getting mixed reviews: welcomed by some countries, while others are assessing the potential risks of Chinese technology.
China calls its global tech effort the Digital Silk Road. Launched in 2015, Beijing describes it as “the technology dimension of China’s Belt and Road Initiative” with a scope that runs from the ocean floor into space. Germany has Chinese technology but is considering whether to ban Chinese 5G equipment.
Maximilian Kall, German Interior Ministry:
These strict checks for potential security risks now also apply to the existing components in telecommunications networks, and that these existing components will also be critically checked in the next few months.
ELIZABETH LEE:
The Chinese embassy in Berlin responded that it is “puzzled and strongly dissatisfied” by Germany’s actions. In the U.S., strong restrictions on Chinese technology started under former President Donald Trump, who cited national security concerns. In the U.K., Huawei technology must be removed from its 5G networks by the end of 2027.
Here’s how China responded to the British decision in 2020.
Hua Chunying, Chinese Foreign Ministry:
The United Kingdom, with no concrete evidence, under the pretext of risks which don't exist at all, has cooperated with the United States to discriminate against, oppress and exclude Chinese enterprises.
ELIZABETH LEE:
Security concerns over the ability for Beijing to spy with Chinese technology and control of the telecommunications infrastructure have raised alarms in some Western countries, but nations from Southeast Asia to Africa have welcomed China’s offers of a cheaper path to digital connectivity says Meia Nouwens, a Chinese security expert.
Meia Nouwens, International Institute for Strategic Studies:
So, in Africa I think the conversations are a little different as they will be in other developing and emerging economies where the emphasis is not so much on security concerns but predominantly on how Chinese companies can help these countries develop their digital economies.
ELIZABETH LEE:
While several countries beyond China provide options for tech equipment such as phones, there is one area of digital competition where the U.S. and China are the main players, says financial risk expert Robert Greene.
Robert Greene, Patomak Global Partners:
Cloud services and cloud computing is a very big area to focus on.
ELIZABETH LEE:
While competition between countries may happen at the geopolitical level, analysts say it also impacts consumers.
Meia Nouwens, International Institute for Strategic Studies:
Understanding this larger geopolitical context is really important for the average consumer to understand that we're not necessarily dealing with another government that operates in the same way as our government does.
ELIZABETH LEE:
As with any technology, Nouwens says, consumers should think about how much they trust the tech they use and weigh the risks that technology may pose as to who is storing personal data and how the information is being used.
Beijing’s Digital Silk Road has the potential to reshape the global economy and put the country in a powerful position around the world.
It’s a way for China to access new markets while gaining geopolitical leverage.
I spoke to Meia Nouwens from the International Institute for Strategic Studies about the impact of China’s technology leverage.
Meia Nouwens from the International Institute for Strategic Studies:
So, the Digital Silk Road is an initiative that was launched by the Chinese government in 2015, and it was seen as initially a subset of the Belt and Road initiative. It's an effort to improve digital economies around the world and digital connectivity around the world.
Think of rollouts of NexGen telecommunications infrastructure such as 5G networks. Think of the building of data centers. Think of platforms and services like e-commerce or fintech solutions that are Chinese companies investing abroad and opening up their services to new markets.
They have a saturated market back at home and really where they're going to make their profit is internationally. So this for them isn't necessarily about the Chinese government or the Communist Party expanding its influence and power around the world. For them this is just normal business at the end of the day.
The thing that I think brings us into a bit of tension at the moment is the question of how what…the state and the party's influence over the Digital Silk Road is.
The ability for the Chinese government to leverage these technologies, this digital infrastructure to gain access to information to data for surveillance or espionage reasons, concerns about potentially the ability for Chinese companies, the ability for the Chinese government to leverage Chinese companies’ integration in national critical infrastructure in order to use that potentially in a gray zone scenario in times of crisis or conflict.
In sub-Saharan Africa however when we look at the data that we've collected with China connects although there is a very strong narrative about digital economies being connected and building up infrastructure in these countries, the data seems to suggest that there are three times as many projects rolled out through the Digital Silk Road that focus on surveillance related technology than on for example smart city technology that seeks to make living in urban environments more efficient.
The Digital Silk Road as I said, will continue to be important for China's own I think national ambitions of being a science and technology superpower in the next decade or so, and to be able of course, to project that that that power is in terms of its own status in the global system.
So whereas in the past we could argue oh well, it's just commercial activity, now we're actually seeing that there are values attached to that commercial activity. There are norms that are being attached to that commercial activity and that China seeks to leverage its relationship with with recipient countries for to be able to influence and shape the international system according to Chinese interests, and that's where I think we're going to see a lot of activity in the next few years.
ELIZABETH LEE:
After pandemic-related delays, talk is underway about resuming work on a Belt-and-Road rail project in Myanmar connecting China’s Yunnan province to the Bay of Bengal --- giving China a more direct link to receive Middle Eastern oil.
Delays and cost overruns to a high-speed rail project in Indonesia has many questioning whether such projects are worth it.
VOA’s Ahadian Utama has the story from Jakarta.
AHADIAN UTAMA, VOA Correspondent:
Every day for the past two years, Heru Sutanto says he has felt anxious. He lives in Padalarang, a city in the Indonesian Province of West Java, situated some 136 kilometers (85 miles) from the nation’s capital, Jakarta.
Heru Sutanto, Padalarang Resident:
This is what I'm really worried about… if it shifts, the roof will also fall… that's why we don’t use this room, I have two rooms that are not being used for my children’s bedrooms. Rather than being at risk, it's better to sleep in the living room.
Sutanto’s house is about 150 meters from the construction of a tunnel. That’s slightly longer than a soccer field. The tunnel is a part of the Jakarta-Bandung high-speed rail project, a landmark project for China’s Belt and Road Initiative. The project aims to connect two of the region’s population centers, Jakarta and Bandung, through high-speed rail.
The housing complex where Sutanto lives is just west of Bandung. The tunnel construction impacts him and more than 100 other families who live in this complex.
Meiki W. Paendong, Environmental Advocate:
The construction process uses blasting techniques so that it has an impact on the damage to their residential houses.
AHADIAN UTAMA:
Residents have tried several times to voice their concerns to officials with the Indonesia-China High-Speed Rail Project, known by their Indonesian acronym KCIC, a consortium formed by Indonesian and Chinese state-owned enterprises. But the residents say the KCIC has not followed up. The consortium also did not respond to VOA’s request for comment.
At the beginning of the project in 2016, the initial cost was $5.5 billion US dollars. 75 percent of that amount was borrowed from the China Development Bank, Indonesian state-owned enterprises took on 15% of the cost, and the rest was provided by the Chinese consortium of state-owned enterprises.
However, costs swelled to more than $6 billion and is expected to increase again to just under $8 billion due to overrun costs according to an official with Indonesia’s Coordinating Ministry of Economic Affairs.
Transportation analysts say, this development has put Indonesian President Joko Widodo’s government in an uncomfortable position.
Darmaningtyas, Transportation Analyst:
The choice for the government is to keep completing it even though the economic consequences will be a lifetime budget burden. If they stopped, it would probably become an abandoned project for life as well.
AHADIAN UTAMA:
Some residents are pushing for the project because it will drastically cut the travel time between Jakarta and Bandung.
Achmad Rasyad lives on the outskirts of Jakarta, and travels to and from Bandung weekly for work.
Achmad Musafa Rasyad, High-Speed Rail Project Supporter:
It normally takes up to 4 hours, but with high-speed train, I hope it can reduce to 1-2 hours.
AHADIAN UTAMA:
But even rail supporters are disappointed by project delays. The high-speed train was to begin operating in 2019, but that has been moved back to 2023.
Back in Padalarang, Sutanto and his neighbors wonder how much longer their homes can withstand the constant drilling.
Ahadian Utama, VOA News, Jakarta, Indonesia,
ELIZABETH LEE:
Dive deeper into China’s Belt and Road Initiative in our special report right there on the front page of our website, VOA News.com.
That’s all for now.
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I’m Elizabeth Lee.
We’ll see you next week for The Inside Story.
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