China bets big on new global links
By Emanuele Scimia
No tanks, no bullets, no boots on the ground, but a mix of money (a lot of money) and engineers. China and its companies are betting on geopolitical corridors to expand their international clout and business opportunities. Though it is grappling with a creeping economic slowdown, the government in Beijing seems to be keen to fund a string of new, innovative transport arteries around the world.
The first project under the spotlight is the overland corridor that should link up Kashgar, in China's western Xinjiang autonomous region, with the Pakistani port of Gwadar in the Arabian Sea. In July, Pakistan's Prime Minister Nawaz Sharif and his Chinese counterpart, Li Keqiang, agreed to build the 2,000 kilometer road link that would pass through the troubled southwestern Pakistani
province of Balochistan, the inaccessible Karakoram mountains and onwards to the Xinjiang, also an area of some unrest. The scheme, worth US$18 billion, provides for a parallel railway to be built later.
China has poured US$200 million into the construction of the currently underutilized Gwadar Port, which is being operated by Chinese state-owned China Overseas Ports Holding Co. If the Gwadar-Kashgar transport link were to materialize, Beijing could both cut the shipping time for its oil imports from African and Middle Eastern energy terminals and gain a trade hub for exports.
From a strategic perspective, China could exploit the new corridor to bypass the Malacca Strait, a bottleneck that the United States Navy could block in case of crisis, disrupting the most vital sea lane of communication for Chinese shipments to and from Africa and the Persian Gulf. It could also be an alternative to the oil and gas pipelines that Beijing is building from the coastal region of Rakhine in Myanmar to the landlocked Chinese province of Yunnan. The development of these infrastructure projects have sparked environmental protests in the country once known as Burma, notably in areas where ethnic armed militias demand more autonomy from the central government in Naypyidaw.
Shifting from Asia to Latin America, there appears to be in the offing a far more challenging test for China's geopolitics of corridors: the $40 billion plan to create an artificial strait linking Nicaragua's Caribbean and Pacific sides. The futuristic waterway should compete with the century-old Panama Canal, through which 5% of global shipping passes each year.
In June, Wang Jing, the chairman of Hong Kong-based HKND Group, secured from Nicaragua's parliament a concession of 50 years to build the canal in exchange of a minority share of any profits. The inter-oceanic corridor would be completed within 2020 and devised for the passage of 400,000-tonnage vessels. It is planned to be 286 kilometers long, three times the length of the Panama Canal - which, on its part, is subject to an $5.25 billion expansion.
Speaking to the Spanish daily El Pais on June 10, Alberto Aleman, ex-president of the Panama Canal Administration, stressed that the projected Nicaragua Canal was not feasible either technically nor financially. In addition, against a backdrop of global economic slowdown and diminishing growth in demand for container shipping, many experts doubt that investors will be willing to finance the mega-project, not least in light of the emergence of new potential shipping lanes such as that running through an ice-free Arctic Sea.
The Chinese-Nicaraguan joint-venture has also the potential to spawn a diplomatic spat, since the government in Managua maintains formal ties with Taiwan but not with China, which officially considers Taipei to be a breakaway province. The current thawing in relations between Beijing and the Republic of China (Taiwan's official name) could suffer a setback if the Chinese leadership were to try to snatch Nicaragua's diplomatic recognition from Taiwanese hands.
Technical viability and diplomatic conundrums apart, China might be propping up the creation of the Nicaraguan corridor to counterbalance the US control of the Panama Canal. It should not have escaped notice in Beijing that a North Korean vessel was seized in the Panama Canal on July 11 after it was found to be transporting weapons from Cuba.
While the Chinese regime has shown no substantial interest in building a canal across Thailand's Isthmus of Kra, owing to exorbitant investments against the lack of considerable time saving for shipping, the development of a new corridor circumventing the Suez Canal is being seen in Beijing as a real game-changer in the Euro-Pacific trade dynamics.
In May, Israeli Prime Minister Benjamin Netanyahu and the Chinese leadership agreed on speeding up the project for the realization of a railway line connecting Israel's Mediterranean ports of Ashdod and Haifa with Eilat in the Red Sea. The new railroad could transform Israel into a launch pad for Chinese export to Europe, but could be also used by other Asian big exporters such as India, Japan and South Korea.
The $4 billion Haifa-Eilat rail connection is planned to be 180 kilometers long. It should be completed in five years and then extended to the port of Aqaba, in Jordan. According to several observers, it will cut transport time in comparison with the route through the Suez Canal and offer an alternative passage in the event of closure of the Egyptian waterway.
Furthermore, Beijing is focusing on linking Africa's resource-rich inland regions to the Indian Ocean. In May, China Kingho Group confirmed its commitment to investing in coal mining in Mozambique. The Chinese energy company plans to build a second seaport in Beira and a railway connecting the city to the Moatize coal basin, in the country's western province of Tete.
China had already signed in March a deal with Tanzania to finance and build a US$10 billion port in the city of Bagamoyo. The project is expected to be completed by 2017 and will include construction of a railway connecting the facility to the Tanzania-Zambia Railway (TAZARA).
Completion of the Bagamoyo Port "would facilitate China-bound shipments of minerals from Zambia, Zimbabwe and the Democratic Republic of Congo via the Indian Ocean", Tanzania's Ambassador to China Philip Marmo told the Sabahi website on March 27.
China is also assisting Sudan in the reconstruction of its broken railway system. Beijing is the biggest buyer of Sudanese and South Sudanese crude and the major contributor to the development of pipelines and refineries in the region, as well as of Port Sudan in the Red Sea.
When the United States opened the Panama Canal in 1913, it drew a new geography and expedited its global rise. In Washington's footsteps, China seems to be trying to create new political and economic spaces while intruding into the US geostrategic backyard from the West Pacific.
Yet, China's geopolitics involves political costs and not only financial expenses, be they from security concerns in Pakistan, the Middle East, Africa's Great Lakes region and the Horn of Africa, or from environmental protests in Myanmar, Israel and Nicaragua.
Emanuele Scimia is a journalist and geopolitical analyst based in Rome.
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