Belt and road, or a Chinese dream for the return of tributary states? Sri Lanka offers a cautionary tale

Patrick Mendis and Joey Wang say Sri Lanka’s debt trap should serve as a warning on Chinese largesse, amid doubts over efficient resource allocation by China’s banks and concerns that borrowing nations may be committing to a Faustian deal

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Published: 5:28pm, 9 Jan 2018Updated: 7:02pm, 9 Jan 2018

On the face of it, China does appear to be the lender of choice over multilateral institutions, for not interfering in the domestic affairs of recipient countries. But there are, in fact, many unwritten but implied strings attached. And the consequences can be costly. Illustration: Craig Stephens

With the 19th Communist Party Congress concluded, President Xi Jinping’s “Thought on Socialism with Chinese Characteristics for a New Era” is now enshrined as the North Star for government action. His thought, incorporated into the constitution, is the continued development of the “Belt and Road Initiative” as part of the “Chinese dream”.

The initiative, first unveiled by Xi in 2013 as a “One Belt, One Road” strategy, is expected to relieve China of the “Malacca dilemma”, what then president Hu Jintao in 2003 called China’s overreliance on the Malacca Strait for trade.

Touted as a modern-day Silk Road, the belt and road network would link China with Central Asia, South and Southeast Asia, Africa and Western Europe, through ports, roads, airports, pipelines and other infrastructure involving “65 countries, 29 per cent of global GDP, and 60 per cent of the world’s population”, as the Paulson Institute put in.

The goal, China says, is to promote efficiency in resource allocation and the “deep integration of markets”, raise standards of regional cooperation, and achieve “open, inclusive and balanced regional economic cooperation”.

Xi Jinping: Why I proposed the Belt and Road

The enormity of the undertaking, of course, gives rise to questions. While many countries along the belt and road are in desperate need of large-scale infrastructure investment, it is also true that there are a myriad other reasons for China to find these investments worth the attendant risks.